The Indian stock market opened on a strong note on Tuesday, with the Sensex and Nifty 50 gaining around 1% in morning trade. The Sensex surged 700 points to touch an intraday high of 72,621, while the Nifty 50 climbed to 22,581.
The broader market, however, showed mixed trends. The Nifty Midcap 150 edged up 0.05%, while the Nifty Smallcap 250 fell 1%.
Reasons behind stock market jump today
1. Banking and IT stocks lead rally
Strong buying in banking and IT stocks helped lift the Sensex and Nifty 50, with both sectors having significant weightage in the benchmark indices. At around 10:15 am, HDFC Bank, TCS, Infosys, HCLTech, ICICI Bank, Tech Mahindra and SBI were among the biggest contributors to the Nifty’s gains.
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The Nifty IT index rose 3.5%, supported by HCLTech’s strong second-quarter results. A stronger dollar and a selloff in AI stocks also lent support to IT shares. Meanwhile, the Nifty Bank index gained nearly 1%.
2. Rupee strengthens against US dollar
The Indian rupee strengthened by 62 paise to 95.16 against the US dollar in early trade on Tuesday, following measures announced by the Reserve Bank of India (RBI) to ease pressure on the currency.
“The restrictions imposed by the RBI by limiting trading in forex derivatives and raising the cost of trading have brought some relief to the rupee, which appreciated by 0.99 per cent to 95.77 to the dollar at market close yesterday,” Livemint quoted V K Vijayakumar, chief investment strategist at Geojit Investments, as saying.
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According to a PTI report, the RBI announced a series of measures to curb dollar demand. Traders also said the central bank intervened directly in the market by selling dollars to support the rupee.
3. Crude oil prices decline
Crude oil prices fell by more than 1% on Tuesday amid expectations that Russia could increase diesel supplies to international markets. Brent crude futures were trading near $105 per barrel in morning trade.
US President Donald Trump said Russia had agreed to supply diesel to international markets, according to reports. Oil prices also came under pressure after the Trump administration temporarily eased sanctions on Russian fuel.