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Arrival of Biden and Covid 19 vaccination; How it influenced historic 'market jump' in Indian stock market

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Arrival of Biden and Covid 19 vaccination; How it influenced historic market jump in Indian stock market
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Mumbai: The Indian stock market is now on the cusp of historic gains. The Indian stock market made an admirable milestone by breaching the 50,000-mark for the first time ever.

The stock market which faced a major decline during 2020 in the grips of COVID 19 reached a historic milestone within a year. If COVID was the main reason behind the decline, then there is a 'virus' behind the gain as well.

The market has been gaining its grounds since the introduction of the COVID vaccine in the country. Expectations in the market have been high ever since the distribution of COVID vaccine started. With this, the market has reached close to 50,000 in the last few days. Investors are hopeful that the economy will recover, as the vaccine can reduce the spread of COVID.

The change of government in the US is another positive factor. President Joe Biden has already signed a declaration amending former President Donald Trump's policies. With this, there has been a revival in the global market as well.

Although the revival of the global market is also reflecting the Indian market, the real reason is something else. The policy of the new government towards China is what the world is looking at. The prospect of an end to the ongoing trade war between the US and China has had a positive impact on the market. The Indian rupee has been gaining ground against the US dollar.The dollar was deceived by the rising unemployment in the US.

Unprecedented foreign investment is flowing into the Indian market. Foreign investment was booming in the country even when COVID was strong. During April-August 2020, foreign investment was 13 per cent higher than the previous year. Despite the shake-up of the economy due to COVID, Indian companies were able to perform better. There was a revival in the vehicle market too.

If the increase in investment during lockdown was on gold, then a change has been found in it within a week itself. Those who approached gold as a safe haven have now moved to the stock market. This paved the way for a return to the Indian market and raised hopes for the future. Another influence on the Indian market will be the Union Budget presentation on February 1 by the Finance Minister Nirmala Sitharaman.

Since the budget is presented during the context of COVID, the assessment is that there will be plans to revive the exhausted areas and plans to strengthen the economy.

The Sensex had gained 300 points to close at 50014.5508 in the first few hours of trading on Thursday. The Nifty is also gaining. The Nifty crossed 14,700 points for the first time. Reliance Indies reaped with benefits in the stock market on Thursday.

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TAGS:Indian stock market 
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