The Indian stock market witnessed a great rally on February 4 as the Sensex picked up over 700 points. It touched the 23,500 level in the case of Nifty 50. Mid and small-cap stocks also saw significant gains. The BSE Midcap and Smallcap indices moved up by over 1% in this increased rally. It pushed the market capitalization of BSE-listed firms to nearly ₹424 lakh crore, where it added ₹4.5 lakh crore to investor wealth.
Key Drivers of the Rally:
Positive Global Sentiment
Gains in major Asian markets, prompted by a change in US
trade policy, boosted investor confidence in India.
US Suspends Tariffs on Mexico and Canada
The US suspension of tariffs on Mexico and Canada helped
calm global markets, easing trade tensions.
Expectation of RBI Rate Cut
The Indian market has been buoyed by expectations that the RBI will cut the rate by 25 basis points in its upcoming MPC meeting.
Attractive Valuations in Large-Caps
The rally in the market received support from large-cap stocks, as the Nifty 50 has declined 11% from a peak.
Technical Support at 23,200
Analysts mentioned that technical indicators do not show
predominantly positive signs, though the Nifty has considerable support at
23,200.
Conclusion: The Indian stock market will likely surge further due to a blend of global optimism, a possible RBI rate cut, attractive valuations, and technical support levels. Investor sentiment getting stronger could keep the market rising in the near term.
Disclaimer: Views herein are of analysts mentioned in this article. All investors must consult a certified professional before making any investment decision.
