Market benchmark indices Sensex and Nifty 50 rebounded on Monday following a sharp decline in crude oil prices amid easing tensions in West Asia. The 30-share BSE Sensex jumped 733 points or 0.96 per cent to make an intraday high of 76,791.99. The 50-share NSE Nifty surged 212 points or 0.90 per cent to make a high of 23,979.
Analysts said that market sentiment has improved meaningfully over the weekend after the US and Iran paused military action, easing fears of an immediate supply disruption.
“Brent crude has corrected sharply, offering a significant tailwind for India through lower inflation expectations, an improved current account outlook and reduced pressure on the rupee,” Rajesh Palviya, head of research, Axis Direct, said.
As of 2 PM, the Sensex index traded 760 points, or 1 per cent higher, at 76,825, while the Nifty 50 was up 220 points, or 0.92 per cent, at 23,987.
On the sectoral front, all the indices traded in the green, barring the Nifty Oil & Gas. The Nifty IT and Nifty Media gained more than 2 per cent each. In the broader markets, both the Nifty Midcap 100 and Nifty Smallcap 100 surged 1 per cent and 1.2 per cent, respectively.
India VIX, the fear gauge index, eased 7.3 per cent to 13, indicating reduced near-term uncertainty.
The market breadth was strongly favouring the bulls, with 2,260 stocks on the NSE showing positive moves, against 973 declines.
Today’s gains added nearly ₹5 trillion to the total market capitalisation of all companies listed on BSE. As per BSE data, the all-India market capitalisation stood at ₹480.4 trillion.
Why is the stock market rising today? Key reasons
Oil prices fall: The price of Brent crude, the global benchmark for oil, dropped nearly 7 per cent, to $90 a barrel. VK Vijayakumar, chief investment strategist, Geojit Investments, said that the sharp dip in crude price from $102 four days ago to around $90-91 is sentiment-positive for the market. Notably, the US military has paused its airstrikes on Iran after nearly two weeks of intensifying bombing, while diplomatic efforts have pushed forward to try to avert a return to all-out war.
“If the de-escalation of the West Asia conflict holds and crude price drifts lower, that can sustain a mild rally in the market. FII flows have been very inconsistent this month, alternating between buying and selling,” he said.
Value buying: A broad-based buying was seen in the market today, with the Nifty IT leading the gains — up 2.5 per cent intraday. The rally in IT stocks also coincided with Jefferies’ upgrade for the Indian IT sector to ‘Neutral’ from ‘Underweight’. The Nifty Auto, Pharma, and FMCG gained more than 1 per cent each.
Rupee strengthens: The rupee appreciated by more than 75 paise against the US dollar on Monday to 95.8, taking cues from a sharp fall in crude oil prices and positive global sentiment after the US and Iran signalled an easing of tensions in West Asia. Nifty technical view: Technically, Rajesh Palviya said that the near-term outlook has turned cautiously constructive, although the Nifty still needs to reclaim the 24,000 mark to signal a meaningful recovery. As long as the index remains below this level, volatility is likely to persist. Immediate support is placed at 23,650, followed by 23,450, while a sustained move above 24,000 could trigger a pullback towards 24,200–24,300. Going forward, crude oil prices and geopolitical developments will remain the key variables, with sustained softness in oil likely to improve market sentiment further.
