Bulls charge: Sensex soars over 1,200 points; 3 factors fueling the rally

Markets gained ground on Wednesday as the Sensex surged over 1,200 points in intra-day trade to reclaim 54,600 levels. On the other hand, the Nifty 50 clawed back to 16,400 levels led by media, realty, and auto stocks. 

The surge comes on hopes of de-escalation of the Russia-Ukraine conflict after the Ukrainian President Zelenskyy indicated that the country was no longer interest in NATO membership, the main reason behind the war.

“With humanitarian causes opening up, markets are recovering losses on hopes of resolution in the Russia-Ukraine conflict, said” Gaurang Shah, senior vice-president at Geojit Financial Services.

Here’s what fueling the rally on Wednesday.

Hope of de-escalation of the Russia-Ukraine conflict: Ukraine President Volodymyr Zelenskyy has said he has "cooled down regarding the question of a NATO membership for his country", which was a key reason why Russia went to war with Russia, media reports suggested. 

The leader of the war-torn nation was also reported to have gone a step ahead in mending fences with Vladimir Putin, stating that he was open to discussing the status of the two breakaway pro-Russian domains of Donetsk and Lugansk which Moscow insists are independent republics. READ ABOUT IT HERE

Crude Oil: Despite US President Joe Biden announcing a ban on imported Russian oil, the European nations are yet to join the course of action sponsored by the US. However, Europe’s deep dependency on energy imports of Russia has not triggered any response from them. “India will be a big beneficiary if the war hits brakes as commodities will cool off from their peaks,” said AK Prabhakar, head of research at IDBI Capital.

Back home, the petroleum ministry and the state-owned oil companies had a long meeting on the impact of the oil price rise on Monday. While there were no clear solutions yet, the Indian government wants to keep the buying route to Russian oil alive. This has become even more necessary as the exports from the US, which had risen to 5 per cent of India’s imports in FY20, will not be available for the foreseeable future, according to petroleum ministry estimates. READ ABOUT IT HERE

Exit polls: The exit poll of the recently concluded assembly elections predict a sweep win for Bharatiya Janata Party (BJP) in Uttar Pradesh. The outcome of assembly polls across these key states – UP, Punjab, Goa, Mizoram and Uttarakhand – on March 10 comes at a time global headwinds in the form of geopolitical crisis between Russia and Ukraine, rising oil prices and the possible aggressive rate hike by the US Federal Reserve (US Fed) later in March have already taken center stage.

Among the lot, the final outcome of UP will be keenly watched, analysts said, as it will pave the way how the ruling National Democratic Alliance (NDA) / Bharatiya Janata Party (BJP) approaches and prepares for the general elections due in 2024. READ ABOUT IT HERE 
 

“The exit polls can be adding to the investor sentiment, clawing back markets from the bottom of the heap,” Gaurang Shah added.