Sensex gained more than 400 points to cross 78,900, while Nifty 50 jumped 119 points to 24,473, as of 12.48 pm. The sharp gains added nearly Rs 3 lakh crore to the total market capitalisation of all companies listed on BSE, pulling it up to Rs 468 lakh crore.
Zudio-parent Trent and State Bank of India (SBI) shares were the top gainers on the Sensex, jumping nearly 4% and 3% respectively. Asian Paints, Eternal, NTPC, Bajaj Finance, Power Grid, Adani Ports and ICICI Bank shares followed, rising 1-2%. On the other hand, L&T, Titan and Kotak Mahindra Bank shares dropped nearly 1% each to lead losses.
Even as India VIX, which measures volatility in the market, remained 5% higher at 18.12, broader markets erased all losses to move into the green, with Nifty Smallcap 100 and Nifty Midcap 100 indices rising up to 0.4%. Sectorally, the Nifty PSU Bank index gained around 2% to lead gains.
Here are the key factors pushing the Indian stock market higher today:
1) Rupee gains
The Indian rupee continued to gain against the US dollar, opening 0.1% higher at 92.8250 on Monday, against the previous close of 92.9250. The Indian currency has rebounded sharply after crossing the 95 mark earlier last month, as the war in the Middle East and the subsequent rally in oil prices raised worries over the possible impact on India’s macroeconomy.
“Overall, the rupee remains supported in the near term, but sustainability will depend on the outcome of geopolitical developments and crude price stability,” said Jateen Trivedi, VP Research Analyst, Commodity and Currency, at LKP Securities.
2) FIIs remain net buyers for third day
Foreign investors remained net buyers of Indian equities for the third consecutive session, purchasing shares worth Rs 683 crore during an extremely volatile session on Thursday. FIIs have bought Indian equities worth more than Rs 1,731 crore over the three days.
However, these purchases are negligible compared to the massive sell-off seen earlier. FIIs have remained net buyers for only four out of the last 32 sessions. They sold Indian equities worth more than Rs 1.6 lakh crore between March 2 and April 9.
After the massive sell-off, it is difficult to say whether the previous session’s slight net buying by foreign investors marks a decisive change in their behaviour or just the calm before another storm.
3) Oil prices sustain below $100 per barrel
After declining over the weekend amid expectations of easing tensions, oil prices rose following fresh escalations. Brent crude futures surged more than 5% to $95.17 per barrel, while WTI crude gained around 6% to $88.83 per barrel.
However, prices remain below the crucial $100 per barrel mark, which they had crossed for the first time since March 2022 following Russia’s invasion of Ukraine.
4) Asian markets in green
Asian markets remained in the green on Monday, with Hong Kong’s Hang Seng gaining more than 1%. South Korea’s Kospi gained around 0.4%, while China’s Shanghai Composite rose 0.75%. Japan’s Nikkei, meanwhile, was up 0.7%. European markets slipped into the red.
Wall Street had ended sharply higher on Friday, with the Nasdaq gaining more than 1.5% and the S&P 500 rising over 1% amid rising expectations of fresh peace talks between Iran and the US culminating in a long-lasting ceasefire in the oil-rich Middle East.
Why caution is warranted
Despite the optimism in the markets, caution is warranted. The US on Sunday said it had seized an Iranian cargo ship that tried to run its blockade, and Iran said it would retaliate, raising the possibility that the ceasefire between the two countries might not last even for the two days it is set to remain in force.
Additionally, Iran said it will not participate in the second round of negotiations after the previous round failed to culminate in a peace deal earlier this month in Pakistan.
“One cannot restrict Iran’s oil exports while expecting free security for others. The choice is clear: either a free oil market for all, or the risk of significant costs for everyone,” Iran’s First Vice President Mohammadreza Aref wrote on social media.
Meanwhile, Trump said his envoys would arrive in Islamabad on Monday evening, one day before a two-week ceasefire ends. A White House official said the US delegation would be headed by Vice President JD Vance, who led the war’s first peace talks a week ago, and would also include Trump’s envoy Steve Witkoff and son-in-law Jared Kushner. Pakistan, which has been acting as the mediator, seems to be preparing for the talks, although the ground for peace negotiations remains shaky.
With the de-escalation and escalation dynamic in the West Asian conflict continuing, the market will remain volatile in the near term, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “With Iran hardening its position again, closing the Strait of Hormuz and threatening to retaliate to the US seizure of an Iranian ship ‘violating the US blockade’, there is potential for a flare-up of the conflict when the ceasefire ends on April 22. However, market signals do not reflect renewed concern over a flare-up of the conflict,” he said.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
