Indian stock markets opened in deep green territory, with benchmark indices Sensex gaining over 560 points to 75,880 and Nifty 50 rising over 173 points, or 0.73%, to 23,832. According to reports from The Economic Times, this marked the second consecutive session of gains for both indices. The rally was driven by a combination of factors including rupee's renewed strength following RBI measures, falling bond yields, and positive investor sentiment. India VIX, which measures market volatility, declined more than 4% to 17.63 during morning trading hours, indicating reduced market uncertainty. As reported by ETMarkets, all sectoral indices on NSE were trading in the green, with Nifty Realty rising more than 1% to lead gains.
IndiGo, Bharat Electronics (BEL), Zomato-parent Eternal, Power Grid, Asian Paints, L&T and Tata Steel shares emerged as the top gainers on Sensex, with some stocks rising up to 3%. However, IT heavyweights Infosys and TCS bucked the trend to trade in the red, snapping a multi-session gaining streak. As reported by The Economic Times, broader markets outperformed benchmarks, with Nifty Smallcap 100 and Nifty Midcap 100 indices gaining up to 0.8% in morning trading. Around 2,063 stocks advanced on the exchange, while 414 declined and 77 remained unchanged, indicating broad-based market participation. According to ETMarkets, Nifty Smallcap 100 and Nifty Midcap 100 indices gained up to 0.8%, with the broader markets significantly outperforming benchmarks.
The Indian rupee recovered 61 paise from its all-time closing low to trade at around 96.25 against the US dollar in early trade, according to The Economic Times. The currency had soared close to $100 per dollar mark in the previous session. The sudden strength in rupee may have been driven by reported dollar-selling intervention by the Reserve Bank of India. The RBI announced on Wednesday it will conduct a dollar/rupee buy/sell swap auction of $5 billion for a tenor of three years on May 26, following a review of current and evolving liquidity conditions. As reported by LKP Securities, the central bank said the swap follows a review of current and evolving liquidity conditions, and comes as it continues to defend a rapidly weakening rupee by selling dollars from forex reserves. The broader trend remains negative as long as the rupee trades below the 96.00 mark, with sentiment still dominated by crude movement and external sector concerns, according to Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities.
Bond yields cooled down overnight, falling significantly below the multi-year highs that they hit earlier this week. As reported by The Economic Times, the benchmark 10-year US Treasury yield had hit a 16-month high of 4.687% on Tuesday, while the 30-year yield climbed to 5.198%, levels last seen in 2007. Oil prices also cooled down sharply overnight, with Brent crude futures dropping nearly 6% after Trump indicated negotiations with Iran were in final stages. However, Brent crude futures gained over 0.8% to $106 per barrel on Thursday morning after inching up slightly. According to Reuters, the sharp drop in oil prices appears to be pricing in the possibility of a breakthrough in the talks, with analyst Yang An at Haitong Futures noting that if Trump insists on making no concessions to Iran, an agreement seems unlikely, and the outcome of the negotiations could reverse sharply. The yield on benchmark US 10-year notes rose to 4.584% on Thursday morning, while the US dollar declined from a six-week high.
According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments, as reported by The Economic Times, 'The recent market movements indicate a buy on dips market construct. Buy on dips strategy has been working well. It appears that the sustained selling by FPIs has also stopped since they were buyers for a couple of days recently'. Nifty needs to start forming higher high and higher low on a sustained basis in the daily chart and a move above the breakdown area of 23,800 - 23,900 to signal strength, said Bajaj Broking. Nifty has key support at 23,200 - 23,000 levels being the confluence of the lower band of the 8th April bullish gap area and the 61.8% retracement of the previous pullback (22,182- 24,601), it added. A lot will depend on the crude price and stability in the rupee, said VK Vijayakumar, with Brent crude declining to $106 this morning being a positive signal. Q4 results have been, so far, good. The negative impact of the energy crisis will be felt in Q1 FY27. But if crude price continues to decline, the remaining quarters will be reasonably good, the analyst further said.
