Indian benchmark indices Sensex and Nifty extended gains on Thursday, supported by hopes of an early end to the US-Iran conflict and easing oil prices. According to The Economic Times, Sensex jumped over 600 points to trade above the 78,700 level, while Nifty 50 gained around over 150 points, rising above 24,350 level. The sharp gains added more than ₹2.5 lakh crore to the total market capitalisation of all companies listed on BSE, pulling it up to ₹462 lakh crore. The rally was broad-based, with 2,235 stocks advancing on the stock exchange, 255 declining and 49 remaining unchanged. As per The Economic Times, India's equity indices jumped 1.6% on Wednesday, tracking gains elsewhere, after reports of a second round of talks between the US and Iran boosted market expectations of the war in West Asia ending soon. The NSE Nifty ended at 24,231.30, up 1.6% or 388.65 points over Monday's close, while BSE Sensex finished at 78,111.24, up 1.6% or 1,263.67 points. Indian markets were shut on Tuesday for Ambedkar Jayanti.
Among the top gainers on Sensex, Zomato-parent Eternal, Infosys, Zudio-operator Trent, L&T, IndiGo, and ICICI Bank were among the top gainers, rising up to 2%. However, heavyweight Reliance Industries (RIL) shares, however, declined marginally to emerge as the top loser. As reported by The Economic Times, India VIX, which measures volatility in the markets, declined around 8.9% to 18.7 in the morning, indicating reduced market uncertainty. According to The Economic Times, India's $2.5 billion Apple bite flips the traditional Chinese script, with multiple stocks showing significant gains including Indian Oil Corp. Share Price up 26.7%, GAIL Share Price up 24.9%, and Adani Ports SEZ Share Price up 24.7%.
The rally was broad-based across sectors, with Nifty Midcap 100 and Nifty Smallcap 100 indices gaining more than 1% each. According to The Economic Times, Nifty Realty gained around 2% to emerge as the top sectoral gainer on NSE. All sectoral indices closed higher on Wednesday, with South Korea gaining 2.1% and Taiwan climbing 1.2%, while Japan, China and Hong Kong rose between 0.1% and 0.4%. The broad-based nature of the rally suggests widespread investor confidence across market segments, with mid and small-cap stocks significantly outperforming large-cap stocks.
Six key factors drove the market rally according to The Economic Times analysis. Iran-US war to end soon? - hopes for an earlier end to the raging war continued to boost global markets, with officials reportedly mulling a return to Pakistan for talks as early as this weekend. Oil prices cool down below $95/bbl - after crossing the crucial $100 per barrel mark in March, oil prices have comfortably fallen below the crucial mark amid optimism. Foreign investors turn net buyers - FIIs remained net buyers of Indian equities worth more than ₹666 crore on Wednesday, though this remains negligible compared to previous massive selloffs. Trump's remark that there will be no need to extend a ceasefire has led investors to believe that the US and Iran may be on the verge of a peace deal, as noted by Dharmesh Kant, head of research at Cholamandalam Securities. However, until the Strait of Hormuz opens completely, markets will be walking on thin ice. Brent crude futures rose 1.6% to $96.2 a barrel on Wednesday after dropping 4.6% on Tuesday, reflecting the ongoing market uncertainty despite peace talk optimism.
According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments, as reported by The Economic Times, "It has been 47 days since the war began. What is the message from the markets? Brent crude is down to $95 level from the recent peak of $119. S&P 500 set a new record yesterday at 7022. Nasdaq also is at a new record high. The message from the crude market and the US stock market is that the West Asian conflict is unlikely to last long. The stock market is discounting an early end to the conflict." The analyst noted that Nifty has rallied 12% following the war-led sharp correction, with the index up around 2,000 points from the lows it had touched around March 30. According to Vipin Kumar, AVP at Globe Capital Market, "The prudent rally since April 2 has recovered 50% of the previous fall at 24,278 levels. Any close above 24,350 levels can propel Nifty towards 24,650-24,800 levels if there is no escalation." The halt in the offensive has been reassuring for equity investors with the Sensex and Nifty gaining nearly 5% from oversold levels since the two-week ceasefire between the US and Iran began on April 8.
