Indian Stock Market Sees Gains: 5 Key Factors Behind the Rise

Indian Stock Market Gains Momentum

The Indian stock market benchmarks, the Sensex and the Nifty 50, saw decent gains in morning trade on Wednesday, December 10, after suffering losses for two consecutive sessions. The Sensex rose by over 350 points to an intraday high of 85,020.34, while the Nifty 50 rose to the day's high of 25,947.65.

Reasons Behind the Rise

Experts have identified five factors behind the rise in the Indian stock market today:

• Short covering: The market is witnessing short covering after two days of significant losses, with heavyweights like Reliance Industries, Kotak Mahindra Bank, and ITC seeing decent buying.
• India-US trade deal hopes: India and the US will begin their trade talks today, amid hopes that both countries will finalize a deal this month, which could boost market sentiment.
• Healthy macro triggers: Healthy fundamentals are making investors buy the dips, with India's favorable growth-inflation dynamics, hopes of earnings recovery, and valuations of large caps returning to normal levels.
• US Fed rate cut hopes: Market participants hope that the US Fed will announce a 25-basis-point rate cut, which could support the Indian rupee and influence stock market sentiment.
• Technical factor: The Nifty 50 has a key support in the range of 25,650–25,700 and resistance in the 25,950–26,000 zone, which could influence the market's direction.

Expert Insights

VK Vijayakumar, Chief Investment Strategist, Geojit Investments, noted that fundamentals are turning in favor of India, with higher growth and corporate earnings achievable in the quarters ahead. He also mentioned that the excessively low inflation rate will start rising in the coming quarters, which will influence corporate earnings growth.

Amruta Shinde, Technical & Derivative Analyst at Choice Equity Broking Private Limited, said that the Nifty 50 continues to face stiff resistance at 25,950–26,000, and a definitive breakout above this resistance band will be essential to revive bullish momentum.

The Indian stock market is seeing a positive trend, driven by these five key factors. However, it's essential to keep in mind that market conditions can change rapidly, and circumstances may vary. Investors are advised to consult with certified experts before making any investment decisions.