Indian stock markets, including the Sensex and Nifty, witnessed a significant surge in early trade, buoyed by a sharp correction in crude oil prices below $100 per barrel and positive global market sentiment stemming from ongoing US-Iran negotiations.
Key Points
- Indian benchmark indices Sensex and Nifty recorded significant gains in early trade, with Sensex jumping 908.98 points and Nifty surging 262.65 points.
- The rally was primarily driven by Brent crude oil prices falling 5.58 per cent to $97.76 per barrel, below the critical $100 mark.
- Expectations of a potential US-Iran deal are contributing to the decline in crude oil prices, which is seen as a positive for India's macroeconomic outlook.
- A drop in oil prices is anticipated to ease concerns regarding inflation, import costs, and corporate profitability in India.
- Global markets also showed positive trends, with Japan's Nikkei 225 and Shanghai's SSE Composite index trading higher, following positive close in US markets on Friday.
Benchmark equity indices Sensex and Nifty surged in early trade on Monday supported by a sharp correction in crude oil prices and a rally in global markets amid improving sentiment surrounding the US-Iran negotiations.
The 30-share BSE Sensex jumped 908.98 points to 76,317.85 in early trade. The 50-share NSE Nifty surged 262.65 points to 23,977.70.
Winners and Losers on Dalal Street
From the 30-Sensex firms, Mahindra & Mahindra, HDFC Bank, Bajaj Finance, Bajaj Finserv, Larsen & Toubro, and InterGlobe Aviation were among the biggest winners.
Tata Consultancy Services and Sun Pharma were the laggards.
How Global Markets Impacted Indian Equities
Brent crude, the global oil benchmark, tanked 5.58 per cent to trade at $97.76 per barrel.
"We are starting the week on a positive note.
"Crude has dipped $5 to below $100 on expectations that US and Iran are close to a deal.
"The market will wait and watch for clarity and certainty since many similar expectations have been belied since the start of the war.
"If this expected deal holds and crude drifts down, that can turn out to be turning point for the market," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.
In Asian markets, Japan's Nikkei 225 index and Shanghai's SSE Composite index were trading higher. Markets were closed in South Korea and Hong Kong due to holidays.
US markets ended in positive territory on Friday.
Impact of Falling Oil Prices on India
Crude oil prices have corrected sharply, marking a significant pullback from recent highs above the $100-105 zone, Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.
"The decline in oil prices is being viewed as a meaningful positive for India's macroeconomic outlook, as softer energy prices help ease concerns around inflation, import costs and corporate profitability," he added.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,440.47 crore on Friday, according to exchange data.
