Why is stock market up today? Top 3 factors behind the rally in Sensex, Nifty today

The Indian stock market benchmarks - the Sensex and the Nifty 50 - clocked healthy gains of nearly 1% in intraday deals on Monday, 5 October, tracking largely positive global cues.

The Sensex rose more than 600 points, or nearly 1%, to an intraday high of 72,540, while the NSE counterpart also climbed by nearly 1% to the day's high of 22,602.

The rally was broad-based as the mid and small-cap indices on the BSE - BSE 150 Midcap Index and BSE 250 Smallcap Index - also rose by nearly 1% during the session.

The overall market capitalisation of BSE-listed firms jumped to nearly ₹ 470 lakh crore from ₹ 467 lakh crore in the previous session, making investors richer by about ₹ 3 lakh crore in a day.

Here are three key factors behind the rise in the domestic stock market today:

The market is witnessing short covering after the recent heavy selloff. The Sensex and the Nifty 50 extended their losing streak for the eighth consecutive week for the week ended 1 October, marking their biggest such streak in 25 years.

While the US-Iran conflict remains a key headwind for the market, fresh diplomatic efforts appear to be influencing sentiment.

The US recently put forward proposals through a mediator, Iran's parliament speaker, Mohammad Bagher Qalibaf, told an open session of Parliament, without details.

A decline in oil prices also supported market sentiment. International crude benchmark Brent crude declined nearly 1% to trade near $101 per barrel on Monday morning amid rising crude exports from the Middle East. Moreover, the release of oil stocks by the Group of Seven nations also boosted supplies, according to Reuters.

(This is a developing story. Please check back for fresh updates.)

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