Sensex @ New Life-Time High

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On Friday 24th September 2021, the Indian Stock Index BSE Sensex crossed the new height of 60,000 level whereas the Nifty is inching towards crossing the mark of 18,000. In this article, let’s discuss the reasons behind this market rally.

Factors which are Driving Stock Market UP

Introduction:

On Thursday 23rd September 2021, the Indian Stock Market Indices Nifty and Sensex rose by around 1.57% and 1.63% respectively. which is inching towards the mark of 18,000 while the BSE Sensex closed at 59,885.36. The Next day i.e., Friday 24th September 2021, the Sensex has crossed the levels of 60,000 for the first time whereas Nifty is heading in pace towards the 18,000 levels, and is just a few points away. Rally was broad-based, with mid-caps and small-caps also witnessing sustained buying.

Factors Driving Stock Market UP:

i) Expected Federal Reserve Announcement:
  • The Indian Stock Market opened on a positive note tracking the global cues.
  • Major reason behind this positivity was the favorable outcome of the Federal Open Market Committee (FOMC)
  • Meet wherein the Federal Reserve announced that the US Central Bank can start. Quantitative Easing Tampering could start from December 2021 and completed by mid-2022.
  • The rise in interest rates of debt instruments, there will be the development of alternative investments classes.
  • As per some readings & reports, when the Interest Rates were hiked every year between 2003-2008.
  • The equity market was also performing well despite increased interest rates due to Good Global GDP Growth.
  • scenario is anticipated by the market participants in the current market situation where economic activities have become normal.
  • The overall global economy is on a growth path.
  • Here due to sluggish economic activity in FY21, the growth numbers in the current fiscal are looking attractive.
  • Hence,The market is trying to implement it through stock market activity.
ii) Some Relief in China’s Evergrande Issue:
  • China’s Property Developer China Evergrande has also announced that it has resolved the payment crisis as of now and has also paid a small part of its dues.
  • To add, the next payment of Evergrande is due on September 29th and October 4th and it will again test its payment crisis issue.
  • Besides that, the People’s Bank of China has infused the liquidity of $14 Billion in the banking system which will moreover address this liquidity issue in China.

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