Five reasons why Indian markets rallied in trade today

MUMBAI: The Indian benchmark indices had a good start led by gains in capital goods, banks, metals and technology sectors. The analysts are of the view that the upward journey of the Indian market will continue with intermittent bout of profit booking.

The Indian markets had been witnessing a roller-coaster ride in the last couple of weeks. Events, both global and domestic, have been influencing the market sentiment. After a sharp decline for three consecutive sessions, the index has bounced back in trade today as global cues turned positive.

Following are the factors that had a positive impact on the market today.

Russia ends military exercise in Ukraine: The conflict between Russia and Ukraine took ugly turn last week following warnings from after the US and European Union. The US warned Russia that any intervention in Ukraine would be viewed as an invasion.

This has spooked the global equities markets on concerns that any military strikes would push global crude oil prices higher.

Late last week, Russia announced that it has withdrawn its military from south-Ukraine border and was looking forward to peace talk.

This led to triple digit rally on the Dow Jones in the US. Same effect was seen in Asian markets on Monday morning.

The Indian markets followed suit and the S&P BSE Sensex closed up 190.19 points or 0.75 per cent.

US air-strikes on ISISI yielding results: The US air-strikes in areas controlled by fighters of the Islamic State of Iraq and Syria (ISIS) are likely to push ISIS fighters on back-foot.

Following the orders of US president Barack Obama, US jets and drones targeted ISIS forces near Irbil. At least three vehicles were reported to have been destroyed and several others damaged.

Obama has said the US would not commit any ground troops in Iraq but air-strikes will continue. "I don't think we're going to solve this problem in weeks."

Meanwhile, brent crude oil prices have stabilized and were trading below $105 per barrel in trade.

“Initially, when Obama started air strikes in Iraq, the markets reacted. But after it was clear that American engagement there would be long term, the jolt subsided. I guess the markets will get used to this and learn to live with it,” said UR Bhat, Dalton Capital Advisors.