Stock market rally today: Sensex and Nifty50 rallied strongly in trade on Thursday as firm global cues and possible steps to stem rupee’s fall boosted confidence. Both benchmarks rose over 1%, even as global and domestic challenges continued to weigh on sentiment.The sharp upswing added more than Rs 4 lakh crore to the total market capitalisation of companies listed on the BSE, pushing the overall valuation closer to Rs 463 lakh crore.Despite the bullish undertone in equities, several risk factors continue to keep investors on edge. The rupee touched a fresh record low after breaching the 95.8 mark against the US dollar for the first time, surpassing its previous lifetime low of 95.7950 recorded on Wednesday. The currency has weakened around 1.4 per cent so far this week and has hit new lows in every trading session from Tuesday through Thursday.
Why is stock market rising today? Top reasons
Tax on bonds to be cut?One of the key factors supporting market sentiment was a report suggesting that the government is evaluating a proposal to substantially reduce taxes on bond investments made by foreign investors to bring policies more in line with global standards and attract overseas capital inflows. According to a Bloomberg report, the proposal was recommended by the Reserve Bank of India and is under active consideration by the Finance Ministry.Following the report, the rupee recovered part of its earlier losses and government bond prices strengthened, leading to a decline of 2 basis points in the benchmark 10-year bond yield to 7.03 per cent. Expectations that such a move could revive foreign institutional investor inflows after sustained selling pressure appeared to lift overall market sentiment.Robust corporate earnings support sentimentA number of large companies have posted solid March-quarter results this earnings season, with Morgan Stanley stating that the earnings cycle appears to be recovering after a six-quarter mid-cycle slowdown. The brokerage expects profit growth to gather momentum further, supported by reflationary measures from the government and the Reserve Bank of India, including interest-rate cuts, banking sector deregulation and liquidity support.It also pointed to strong capital expenditure trends across sectors such as energy, defence, semiconductors, fertilisers and data centres, along with major tax reductions and a relatively growth-supportive fiscal stance.Markets closely tracking the US-China meetingInvestor attention is also firmly focused on the meeting between US President Donald Trump and Chinese President Xi Jinping following Trump’s arrival in China, amid years of geopolitical tensions between the world’s two largest economies.According to an ET report, Shaun Rein of China Market Research Group described the meeting as highly significant, noting that it marks the first visit by a US president to China in nine years since trade tensions escalated during the 2017-18 period. He said countries across the world, including India, the US, Europe and Africa, have been impacted by the prolonged geopolitical divide between Washington and Beijing.Positive trend across global marketsMost major global markets traded with gains, helping improve overall investor sentiment. South Korea’s Kospi surged nearly 2 per cent, while Hong Kong’s Hang Seng posted modest gains. In contrast, Japan’s Nikkei and China’s Shanghai Composite ended sharply lower.European equities had also finished higher in the previous session, with France’s CAC, the UK’s FTSE and Germany’s DAX advancing by as much as 0.75 per cent. On Wall Street, US markets closed firmly in positive territory, led by technology stocks, with the Nasdaq climbing more than 1 per cent.Cooling bond yields aid equitiesUS Treasury yields eased marginally, providing some relief to equity markets. The benchmark 10-year US Treasury yield slipped to 4.455 per cent, while the 30-year bond yield declined to 5.027 per cent. The yield on the 2-year Treasury note, which generally reflects expectations around future Federal Reserve rate decisions, fell to 3.965 per cent.Lower bond yields often reduce the attractiveness of fixed-income investments, prompting investors to shift towards equities and other risk assets, which can support stock market gains.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.)
