Share Market Today: The stock market took a U-turn, these 7 reasons led to a recovery of Rs 7.7 lakh crore

Share Market Today: The atmosphere of gloom and uncertainty at the time of closing of the stock market on Monday, it seemed that Tuesday would also be a day full of troubles for investors. But the overnight movement of the US stock market and the statement of Donald Trump completely changed the picture. When the Indian markets opened on Tuesday morning, there was only greenery everywhere.

Nifty 50 started strongly at 22,446 and showed a jump of about 1.88%, climbing to an intraday high of 22,577. Sensex also started from 74,013 and reached a high of 74,421 and registered a strength of 1.75%. Bank Nifty opened gap-up at 50,388 and then climbed to 50,793, increasing by 1.87%.

Brightness returned in all sectors

Buying was seen in all sectoral indices of BSE. The small-cap index rose by 1.35% and the mid-cap by about 1.10%. In just 20 minutes, investors got a tremendous recovery of Rs 7.7 lakh crore. By 11:45 am, 340 stocks hit a circuit, of which 165 reached the upper and 175 lower circuits. Also, 37 stocks touched a 52-week high and 46 touched the lower level.

What is the reason for the boom? Know 7 big reasons

Easing in trade war tensions

US President Donald Trump indicated that many countries, especially Vietnam, are ready to negotiate on US tariffs. This has reduced the fear of trade war, and global trade sentiment has improved.

Positive signals from the global market

A tremendous boom was also seen in Asian markets. Japan's Nikkei rose by 5% and Hong Kong's Hang Seng rose by 1.5%. This increased investor confidence and Indian markets also gained momentum.

Effect of short covering

After Monday's decline, a large number of traders had taken short positions. As soon as the market rose on Tuesday, they started covering them, which further strengthened the uptrend.

RBI rate cut expected

RBI's policy meeting is going on and it is expected that there may be a rate cut of up to 25 bps. This will increase liquidity in the market and help in controlling inflation.

Positive environment before Q4 results

Good Q4 results are expected from the banking sector. Many banks are making plans to raise funds, which has strengthened the expectation of financial stability and growth.

Fall in crude oil prices

Brent crude prices have come down below $65, which is very relieving news for energy importing country India. This will control inflation and reduce pressure on the rupee.

US bond yield and dollar fall

The US 10-year yield fell from 4.5% to 4.14% and the 2-year yield fell from 4.28% to 3.71%. The dollar index also came down, which increased the possibility of FII investment in emerging markets like India.

Investors got huge profits

The market cap of BSE reached Rs 3,96,95,580.37 crore on Tuesday, which was Rs 3,89,25,660.75 crore a day earlier. That is, within just 20 minutes, the market recovered Rs 7.70 lakh crore - which is no less than a relief package.