Explained: Fed, crude oil, dollar, inflation… Sensex hits record high, investors make big money

The Indian stock market celebrated Diwali about 50 days ago. Both Sensex and Nifty hit record highs. Sensex hit the record high of 83 thousand points for the first time. In fact, due to the lower than expected US inflation, there was a huge surge in the stock market. During the trading session, Sensex saw a surge of about 1,600 points. On the other hand, Nifty has seen a surge of over 500 points. This means that both closed today with a rise of more than one and a half percent.

According to experts, due to the larger-than-expected decline in US inflation, it is certain that at the Federal Reserve meeting in September interest rates could be cut by 0.25 percent or more. As a result, the dollar index has declined. According to CME Fedwatch, this increased the probability of a 25 basis point rate cut by the Federal Reserve on September 18 from 66 percent to 85 percent, while the probability of a major 50 basis point rate cut decreased from 34 percent to 15 percent.

According to experts, the price of crude oil is below $72 per barrel. The effect of this is visible on the stock market. Let us also tell you what kind of figures have been seen on the stock market and what are the 5 reasons why the market has risen.

Sensex and Nifty hit records

The two major stock market indices, Sensex and Nifty, hit record highs. The main index of the Bombay Stock Exchange closed at 82,962.71 points with a rise of 1,439.55 points or 1.77 per cent. However, during the trading session, the Sensex rose by about 1,600 points and touched an all-time high of 83,116.19 points. However, on Thursday, the Sensex opened at 81,930.18 points.

If we talk about Nifty, the main index of the National Stock Exchange, it has also seen a good rise. According to the data, it closed at 25,388.90 points with a gain of 470.45 points. During the trading session, Nifty rose by 515 points and touched an all-time high of 25,433.35 points. If experts are to be believed, further increases are likely to be seen in the coming days.

Investors benefited by Rs 6 lakh crore

Due to this boom in the stock market, market investors have also made huge profits. The profits and losses of stock market investors are related to the rise and fall of the BSE market capitalization. The market capitalization of the BSE on Wednesday was Rs 4,60,76,150.02 crore. Which rose to Rs 4,66,66,051.26 crore on Thursday. This means that an increase of Rs 5,89,901.24 crore was observed. This is where investors benefit.

There was an increase in these shares.

On the stock market front, a 4.15 per cent rise was seen in the shares of Hindalco on the National Stock Exchange. Shares of Bharti Airtel rose nearly 5 per cent on Thursday, touching a 52-week high of Rs 1,650.75 on the NSE. This stock has seen a rise of around 7 per cent in the last four trading sessions. However, after market close, the company’s shares closed at 3.56 per cent. Shares of NTPC closed 3.36 per cent higher, Shriram Finance 3.36 per cent higher and Grasim shares closed 2.94 per cent higher.

The stock market rose for these reasons

1. US inflation slows: On Wednesday, US inflation was seen to decline. In August, the CPI figure stood at 2.5 percent. In July, the figure was 2.9 percent. This is why the stock market has seen support.
2. Possibility of Fed rate cut: The possibility of the Fed raising rates has increased due to falling inflation figures. According to CME Fed Watch, 85 percent of people believe a 0.25 percent Fed rate cut is possible. While only 15 percent of the population believes a 0.50 percent rate cut is possible.
3. Crude oil price drop: Oil prices have fallen by more than 10 percent in September due to weak Chinese demand and concerns about global supply. Low oil prices are positive for Indian stocks as India is a major importer of crude oil. Lower oil costs reduce inflationary pressures and help improve corporate margins, contributing to the current market growth.
4. Boom in foreign markets: Following the global markets, Indian stocks also showed an overall bullish trend. Asian stocks rose on Thursday on the back of a technical rally on Wall Street and unexpected US core inflation data. The MSCI Asia-Pacific index rose 1.5% and the Nikkei gained 3.3%. European stocks also rose on expectations of another ECB rate cut, keeping borrowing costs near 2022 lows.
5. Weak Dollar Index: The dollar index has fallen below the 102 level and is currently at 101.72. The weakening dollar is positive for Indian and Asian stock markets as it makes emerging market assets more attractive for foreign investors.
6. Investment from foreign investors: Foreign institutional investors (FIIs) continue to play a major role in the strong performance of the Indian market. So far in September, FIIs have invested around Rs 17,016 crore in domestic equities, reflecting confidence in the resilience of the Indian economy. Since June, FPIs have been buying equities continuously, reversing their earlier outflow of Rs 34,252 crore in April-May.