Factors Fuelling Today's Rally On Stock Market Indices

The Covid 19 outbreak fuelled a sharp sell off in the Indian stock markets which tumbled more than 30% in March alone and now has dropped out from the list of top 10 stock markets globally. But on some good news on the coronavirus front and as the world economy is slowly gearing up to open up including India, there has been some resilience in benchmark indices in trade on April 27, 2020.

Factors Fuelling Today's Rally On Stock Market Indices

Here we will know about some other factors that are spurring today's rally of over 600 points on the Sensex and 180 points on the Nifty which hit 9300 levels today.

1. RBI's bazooka for ailing mutual fund industry:

There has been no sector which has not felt pain due to Covid 19 and AMCs also saw huge redemptions in March. And failing to meet up the redemption pressure, Franklin Templeton on Thursday evening announced closure of its six credit funds.

And responding to the crisis being faced by the sector, RBI swiftly came to the rescue of the industry and announced a special liquidity window of Rs. 50000 crore.

Notably, this has been taken positively by the stock markets as the mutual fund industry is also an integral investor in listed Indian stocks.

2. Earnings Growth reported not feeling the heat due to Covid 19 in quarter ended March:

The companies which have recently reported their results including the likes of TCS, Infosys, Tech Mahindra, ICICI Prudential have not felt the Covid 19 impact heavily in the quarter ended quarter.

Also, Indusind Bank which is to report its fourth quarterly results today despite higher provisioning has been trading higher by around 5%, with Nifty Bank up over 2.5% at the time of writing this report.

3. Stimulus measures being announced to tackle Covid 19 and Global cues:

Even as we await stimulus measures for the Indian economy, Bank of Japan has been going easy on the monetary stimulus and this is what is lifting the sentiment on stock indices globally.

Markets in the Europe have also opened strong with German DAX up 2% and French CAC up 1.77%. Also, US Futures have reversed losses and trade higher.

4. Lifting of Lockdown Restrictions:

The meet of central government home ministry is underway to work out the plan on the exit of the lockdown. So, hopes on likely lifting of the lockdown at few of the states where there is not much threat of Covid 19 infection has helped the sentiment.

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