look news india
The direct impact of international politics and geopolitical turmoil is now clearly visible on commodity and stock markets around the world. There is a new turmoil in the global markets after the major political setback suffered by former President Donald Trump and his party in the important elections held in America. The most positive impact of this political reshuffle has been on the Indian stock market, where an earthquake-like boom was seen in the initial trading of the week itself. Bombay Stock Exchange’s main index Sensex jumped with a historic jump of more than 1680 points, while National Stock Exchange’s Nifty was also seen trading with strong gains. Many major global and domestic economic factors are working behind this tremendous growth, which has once again raised the confidence of investors to the sky.
Impact of US election results and Trump’s defeat on global markets
With the changing political scenario in America, the global investor community has heaved a sigh of relief. After the defeat of Donald Trump’s party in the US mid-term elections and the change in political balance, market experts believe that this may lead to more stability and diplomatic softness in future US policies. This political development has also affected the US bond yield and dollar index, due to which the inclination of foreign institutional investors (FIIs) towards emerging markets has increased rapidly. When the clouds of uncertainty disappear in the world’s largest market, its direct benefit goes to the stock markets of developing countries with strong infrastructure like India, which has been clearly visible this time too.
Big relief to Indian economy due to huge fall in crude oil prices
The biggest economic reason behind this stormy rise in the Indian stock market is the huge fall in the prices of crude oil in the international market. Due to changing political equations in America and new equations of global supply, the prices of Brent crude have fallen to a low level. Since India meets a large part of its energy needs through imports, cheap crude oil reduces the pressure on the country’s import bill and current account deficit to a great extent. Due to falling oil prices, there is hope of reduction in transportation cost, logistics and manufacturing expenses within the country, due to which the profits of the companies improve and strong buying is seen in the stock market.
Heavy buying by foreign institutional investors (FIIs) and increase in investors’ wealth.
Heavy purchases by foreign investors have added to the splendor that has returned to Dalal Street. For the last few sessions, foreign fund houses have been investing capital in Indian stocks on a large scale. Due to all-round buying as soon as the market opened, a huge increase of about Rs 8 lakh crore was recorded in the total wealth of investors within a few hours. All major Sensex stocks were seen trading in the green, which proves that both domestic and foreign investors continue to have unwavering faith in the growth story of the Indian corporate sector. Maximum buying has been seen in shares of banking, auto, IT and metal sectors.
Strengthening of Indian Rupee and strong signs of macro-economics
Along with this spectacular jump of the stock market, the Indian Rupee has also made a strong comeback against the US dollar in the foreign exchange market. The rupee strengthened to near its two-week high on lower spending on crude oil imports and continued inflow of foreign investment. This strengthening of the rupee makes the country’s imported goods cheaper and reduces the burden of repaying foreign debt. Apart from this, steps being taken at the central level to keep retail inflation under control within the country are also keeping investor morale high. On the basis of all these positive macro-economic indicators, India remains the fastest growing major economy in the world even amidst global turmoil.