Sensex rises 1,300 points in three days: Here’s what’s driving the markets

Stock markets rose on Wednesday to curb last week’s volatility as they added to their meager gains in the past two sessions. The BSE Sensex Index rose 700 points to 58,665 points, while the NSE Nifty50 Index rose 188 points to exceed 17,500 points. In doing so, the two indices posted gains of 1,300 and 360 points, respectively, since Friday.

Wednesday’s sharp recovery came on hopes that the end of the Russia-Ukraine war may be in sight as Russia said on Tuesday it would scale back its military operation in Ukraine.

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Moreover, Brent crude prices slipped again from the recent highs amid expectations of lower demand, which provided further support to investors.

Among the sectors, the outlook for the financial sector — leading banks, leading housing finance firms, fintech leaders and select non-bank financial firms — looks bright for FY23 and its fair assessment is said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

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“Pharma, housing-related and telecoms sectors could provide support for the rally. But the rally is likely to culminate in profit taking and concerns arising from a hawkish Fed,” he added.

In the meantime, here are the factors in detail that increased investor confidence this week:

Signs of armistice between Russia and Ukraine: After a number of fruitless deliberations over the past month, the two sides held face-to-face talks on Tuesday in Turkey, paving the way for ending the impasse. Russia has pledged to withdraw its forces from the Ukrainian capital of Kyiv and the northern city of CCC in the hope of building mutual trust to advance peaceful dialogue. This lifted the sentiment of global markets overnight, with US and European indexes closing sharply on Tuesday. On the other hand, Ukraine put in place a framework, agreeing to adapt the neutral situation, but also demanded security guarantees from NATO allies.

Meanwhile, the United States remains concerned about Russia’s claims of de-escalation, as it believes this could be just an attempt to divert attention. Ukrainian President Volodymyr Zelensky was also quoted as saying that his country would not keep its guard up. Whether Russia’s troop withdrawal claims are true or not remains to be watched.

F&O Monthly Expiry: Ahead of the monthly F&O expiration on Thursday, investors acquired major financial and auto heavyweights. Among these, twins Bajaj, Maruti, M&M, Axis Bank, ICICI Bank and HDFC were the top winners, up 1-4 percent.

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Portfolio review before FY23: Furthermore, the shares posted steady gains towards the end of FY 2022 (FY22). Hence, market participants are reorganizing their portfolios before the start of the new financial year. Frontline indices – the S&P BSE Sensex and Nifty 50 – are set to post double-digit returns for their second consecutive fiscal year in 2021-22 (FY22) with gains of 16 percent and 18 percent, respectively, but they are the little hats as they focus all the work in the last year. Read about it here

Slight ease in crude oil prices: Brent crude prices, which until now have been one of the main concerns for economies around the world, retreated from their recent highs, recording a sharp decline of about 9 percent on Monday to levels of $110 a barrel. It came amid expectations of easing demand from China, the second-largest importer of crude, as the country’s financial hub Shanghai was placed under Covid-19-related restrictions until around April 5.

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