The Indian stock market has put investors through a turbulent phase over the past five months, erasing crores in wealth. However, the past two days have seen a strong recovery, pushing the total market cap of BSE-listed companies back close to ₹4 trillion, adding ₹12 lakh crore to investors’ wealth. This raises the question: Are good days returning for the market?
₹12 Lakh Crore Earned in Just 2 Days
The stock market’s recovery on Wednesday and Thursday added ₹12 lakh crore to investor wealth. The total market cap of BSE-listed companies surged to ₹3,97,12,330 crore from ₹3,85,59,355 crore at Tuesday’s close. This marks an increase of ₹11,52,975 crore in just two trading sessions.
Notably, small-cap and mid-cap stocks have seen strong buying interest, driving the highest recovery.
Are Good Days Coming for the Market?
Market experts remain cautiously optimistic. While it is difficult to declare the end of the bearish phase, analysts predict that April will bring major developments that could directly influence market trends.
Key Market Trends:
- Domestic investors continue to infuse ₹5,000-6,000 crore into the market, supporting growth.
- The U.S. has announced reciprocal tariffs from April 2, adding global market uncertainty.
- Ongoing volatility is expected as economic indicators shift.
Factors Driving the Market Rally
1. China’s Expected Economic Stimulus
Investors are anticipating that China may announce a new economic stimulus package to boost growth. This is expected to impact base metals like copper and aluminum, leading to a rise in global prices.
2. Positive Global Market Signals
- Trump’s tariff decision: The U.S. has delayed new tariffs on Mexico and Canada, boosting sentiment in Asian and American markets.
- Stronger global equities: Investors are regaining confidence in emerging markets.
3. Weakening U.S. Dollar Index
- The U.S. dollar index has dropped to a four-month low of 104.3, benefiting emerging markets like India.
- A continued decline in the dollar would likely reduce foreign investor (FII) selling, further boosting the stock market.
4. Declining Crude Oil Prices
- International crude oil prices have fallen to a six-month low, improving investor sentiment.
- Lower oil prices benefit India, reducing import costs and inflationary pressures.
5. RBI’s Liquidity Support Measures
- The Reserve Bank of India (RBI) has taken several steps to ensure sufficient liquidity in the banking system.
- These measures have provided strong support to banking and financial stocks, reinforcing the market’s upward trend.
A Market Poised for Recovery?
While short-term fluctuations remain inevitable, recent global and domestic factors suggest positive momentum for the stock market. If China’s stimulus materializes, crude prices stay low, and the dollar weakens further, the BSE’s resurgence could signal a stronger long-term rally for investors.
