Stock markets rally in early trade on slump in oil prices, positive trend in Asian peers
Crude crash lifts Sensex, Nifty as war fears ease
Benchmark indices Sensex and Nifty extended their previous session’s rally in early trade on Wednesday, tracking a sharp decline in crude oil prices and a positive trend in Asian markets, amid hopes of de-escalation in the West Asia war.
The 30-share BSE Sensex jumped 885.32 points to 74,953.77 in early trade. The 50-share NSE Nifty surged 307.65 points to 23,220.05.
From the 30-Sensex firms, Mahindra & Mahindra, UltraTech Cement, Adani Ports, HDFC Bank, Trent and Eternal were the biggest gainers.
Tech Mahindra and Infosys were the laggards.
Brent crude, the global oil benchmark, tumbled 4.34 per cent to USD 99.95 per barrel.
In Asian markets, South Korea’s benchmark Kospi, Japan’s Nikkei 225 index, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index were trading in positive territory.
The US market ended lower on Tuesday.
“Asian markets traded higher, buoyed by comments from (US President) Donald Trump suggesting the possibility of negotiations between the United States and Iran. This potential for diplomatic engagement has provided some relief to global investors, raising hopes of a de-escalation in Middle East tensions.
“Crude oil prices have slipped below the USD 100 per barrel mark, reflecting sustained market optimism around the prospects of a diplomatic breakthrough,” Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.
However, conflicting signals from Iran, which has denied any formal talks, suggest that the situation remains fluid, potentially limiting the durability of this optimism, he added.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 8,009.56 crore on Tuesday, according to exchange data. Domestic Institutional Investors (DIIs), however, bought stocks worth Rs 5,867.15 crore.
“Hope is returning to the market with indications of de-escalation in the conflict. Remarks from President Trump and from the Iranian regime indicate that the conflict might end soon. Particularly the reiteration from Iran that ‘non-hostile ships can transit the Strait of Hormuz’ is good news that will mitigate India’s energy concerns.
“These positive geopolitical developments have reflected in sharp decline in Brent crude to around USD 98,” V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.
On Tuesday, the Sensex jumped 1,372.06 points, or 1.89 per cent, to settle at 74,068.45. The Nifty surged 399.75 points, or 1.78 per cent, to end at 22,912.40.
