Sensex jumps 776 points, Nifty nears 24,000 as oil prices plunge
The 30-share BSE Sensex climbed 776. 01 points, or 1. 02 per cent, to close at 76,835. 78. Eternal, InterGlobe Aviation, Infosys, Bajaj Finance and Shriram Finance were among the leading Nifty gainers.
New Delhi: Indian benchmark indices rebounded sharply on Monday, snapping a five-session losing streak as easing tensions between the United States and Iran triggered a steep fall in global crude oil prices. The 30-share BSE Sensex climbed 776. 01 points, or 1. 02 per cent, to close at 76,835. 78. The NSE Nifty50 advanced 228. 50 points, or 0. 96 per cent, to settle at 23,995. 95, just below the 24,000 mark. The rally was broad-based, with buying seen across information technology, media, realty, automobile, healthcare and financial stocks. The Nifty Midcap 100 and Nifty Smallcap 100 indices gained 1. 11 per cent and 1. 31 per cent, respectively. Eternal, InterGlobe Aviation, Infosys, Bajaj Finance and Shriram Finance were among the leading Nifty gainers. ONGC, Cipla, HDFC Life, HDFC Bank and Dr Reddy’s Laboratories were among the laggards. Here are six major factors that supported the market recovery:Sharp fall in crude oil pricesGlobal oil prices declined after the US and Iran paused military strikes, easing immediate concerns over supply disruptions in West Asia. Brent crude fell below $90 a barrel during the session after crossing $100 last week. Lower crude prices are favourable for India, which imports a large portion of its energy requirements. They can help reduce the country’s import bill, ease inflationary pressure and lower costs for businesses. Easing market volatilityIndia VIX, commonly regarded as the domestic market’s fear gauge, declined nearly 10 per cent. The fall indicated reduced expectations of near-term volatility after geopolitical tensions eased. Positive global cuesGains across international equity markets and optimism over a possible de-escalation in West Asia improved investors’ appetite for risk. Falling US Treasury yields and a weaker dollar also supported emerging-market assets. Buying in IT and realty stocksTechnology shares were among the biggest contributors to the rally, led by gains in Infosys and other large IT companies. The Nifty IT index rose 2. 34 per cent, while the Nifty Realty index gained 2. 28 per cent. Nifty Media advanced 2. 39 per cent. Expectations that the US Federal Reserve may leave interest rates unchanged at its upcoming meeting also supported sentiment towards technology stocks. Recovery in the rupeeThe rupee strengthened against the US dollar as falling oil prices, a softer dollar and improving global sentiment reduced pressure on the domestic currency. Lower oil prices are particularly supportive for the rupee because India is a major crude importer. Encouraging corporate earningsBetter-than-expected quarterly results from several companies also supported stock-specific buying. IDFC First Bank shares rallied after the lender reported a 132 per cent year-on-year rise in its June-quarter profit to Rs 1,075 crore. AU Small Finance Bank also gained after its quarterly net profit increased 37 per cent to Rs 796 crore. Investors will now closely track developments in West Asia, movements in crude oil prices, domestic corporate earnings and monetary policy decisions from the US Federal Reserve, Bank of England and Bank of Japan.