5 Reasons Why Bulls Roared Back in the Stock Market, Boosting Investor Gains

Business News: After the Covid period of the year 2020, the stock market witnessed a decline for 6 consecutive weeks till August 8. Due to which the Sensex was seen below 80 thousand points. On the other hand, the valuation of Nifty decreased significantly. Now on Monday, the 'bull' was seen returning to the stock market once again. Where the Sensex saw an increase of about 750 points. On the other hand, the Nifty also saw an increase of about 222 points. According to experts, due to the decline in the stock market for 6 consecutive weeks, there has been a decrease in valuation.

On the other hand, apart from the improvement in the rupee, the effect of the fall in crude oil prices has also been seen. The rise in the Asian markets and the mutual fund data released by AMFI have led to a rise in the stock market. Let us also tell you what kind of figures have been seen in the stock market and discuss in detail the reasons due to which the bulls are seen returning to the market.

Tremendous rise in the stock market

The stock market saw a good rise on Monday. The Bombay Stock Exchange's major index, Sensex, closed at 80,604.08 points with a gain of 746.29 points. However, during the trading session, the Sensex rose by 778 points to reach the day's high at 80,636.05 points. If we look at the data, the Sensex opened with a slight gain at 79,885.36 points on Monday.

On the other hand, the National Stock Exchange's major index, Nifty, closed at 24,585.05 points with a gain of 221.75 points. While during the trading session, Nifty was also seen at 24,600.85 points. According to experts, the stock market may see further increase in the coming days.

Stock Market Rise Reasons

Valuations fall: After the stock market fell for six consecutive weeks due to heavy tariffs imposed by US President Donald Trump on India, valuations have seen a significant decline, leading to increased buying. Santosh Meena, research head at Swastika Investmart, said in a media report that the momentum is still tilted to the downside, citing uncertainty over US trade talks.

Meena told Reuters that the recent decline could bring technical correction, although ultimately trade updates will dictate the decision. Trump has imposed a 50 percent duty on goods coming from India, half of which has already been implemented, while an additional 25% duty, which is a punitive duty on buying Russian oil, will come into effect from August 28.

Global market boom 

Major stock indexes in Asia rose on Monday due to good earnings of companies and high valuations of the tech sector, while an important report on US inflation could determine the direction of the dollar and bonds. Japan's stock market was closed for a holiday, but futures rose to 42,465 and indicated that the index touched its lifetime high of 42,426 this week.

The deadline for US tariffs on China is set to expire on Tuesday and is expected to be extended again, while Trump and Russian leader Vladimir Putin will meet in Alaska on Friday to discuss Ukraine, which could affect trade and geopolitics. On the other hand, the US stock market saw a rise on Friday.

Buying SBI and Grasim shares

Gains in Grasim Industries and State Bank of India shares due to excellent quarterly earnings also contributed to the positive market momentum. Shares of Grasim Industries rose 2.2 percent after it reported better-than-expected earnings. Jefferies and Morgan Stanley raised price targets on the stock, citing strength in its chemicals business. Shares of public sector banks rose up to 2 percent, led by a 2.2 percent rise in State Bank of India. The country's largest lender by assets reported a 12.5 percent year-on-year profit. 

Growth on strong non-debt income

Oil prices fall: Oil prices fell in Asian trade on Monday, extending a more than 4 percent drop in the past week as investors await the outcome of talks between the US and Russia on the Ukraine war later this week. Brent crude futures fell 33 cents, or 0.5 percent, to $66.26 a barrel, while US West Texas Intermediate crude futures fell 39 cents to $63.49 a barrel.

After Trump said on Friday that he would meet Russian President Vladimir Putin in Alaska on August 15 to negotiate an end to the war in Ukraine, expectations of a possible end to sanctions limiting Russian oil supplies to international markets have risen.

Equity Mutual Fund Investment Surge

Solid figures from AMFI: According to data released by the Association of Mutual Funds in India (AMFI) on August 11, net investment in equity mutual funds increased by 81 percent to Rs 42,672 crore in July. Moreover, this latest investment by investors marks the 53rd consecutive month of net investment in this sector. The data shows that despite the decline in the equity market for the sixth consecutive week, retail investors are optimistic about the markets.

27 out of 30 stocks rose

The special thing is that among the top 30 stocks of BSE, 27 stocks saw a rise and 3 stocks closed with a slight decline. The special thing is that the highest increase was seen in Tata Motors, and a rise of 3.24 percent was seen.

While the shares of Eternal, Trent, SBI, and Ultra Cement closed with a gain of 2 to 3 percent. Shares of L&T, Adani Port, Reliance Industries, Kotak Bank, Axis Bank, Mahindra & Mahindra, HDFC Bank, and Sun Pharma have seen an increase of more than 1 percent. Shares of HCL Tech, Asian Paints, Tata Steel, ITC, NTPC, Hindustan Unilever, TCS, Infosys, Bajaj Finserv, Tech Mahindra, Bajaj Finance, Titan, ICICI Bank, and Power Grid have seen an increase of less than 1 percent. In contrast, shares of Maruti, Bharti Airtel, and BEL have closed in the red.

How much did the investors benefit?

Due to this rise in the stock market, investors have also benefited a lot. The profit and loss of investors is linked to the market cap of BSE. If we look at the data, the market cap of BSE on Friday was Rs 4,40,63,525.24 crore. On Monday, the same market cap increased to Rs 444,029,317,600. This means that the market cap of BSE has seen an increase of Rs 3,39,406.52 crore. However, on Friday, investors had suffered a loss of more than Rs 4.72 lakh crore.