Indian Markets Roar Back: Sensex and Nifty Surge on Geopolitical Calm and Easing Oil Prices
Indian stock market indices, the Sensex and Nifty, have delivered a powerful rebound, injecting a palpable sense of relief and optimism among investors. Over the last three trading sessions, the benchmark Sensex catapulted by an impressive 1,859 points, a gain of 2.27 percent, while the broader Nifty 50 ascended 577.1 points, marking a 2.32 percent rise. This significant upswing is largely attributed to a crucial de-escalation of geopolitical tensions between Iran and Israel, coupled with a welcome decline in global oil prices and a strengthening Indian Rupee.
Thursday’s Explosive Performance: A Testament to Renewed Confidence
The momentum culminated in a particularly strong showing on Thursday, as the BSE’s 30-share Sensex soared by 1.21 percent, adding a remarkable 1,000.36 points to close at 83,755.87. Simultaneously, the National Stock Exchange’s Nifty 50 mirrored this robust performance, advancing 1.21 percent, or 304.25 points, to settle at 25,549. This one-day surge underscored the market’s enthusiastic response to the improving global landscape.
Geopolitical De-escalation: The Catalyst for the Rally
The primary driver behind this market resurgence appears to be the perceived stability stemming from the Iran-Israel truce. This apparent ceasefire has profoundly eased anxieties among market participants who were previously concerned about potential disruptions to global supply chains and broader economic instability. “The benchmark index reflected strong investor confidence, underpinned by the apparent stability of the Middle East ceasefire, which has eased concerns over potential supply chain disruptions,” commented Vinod Nair, Head of Research at Geojit Investments Ltd., encapsulating the sentiment.
Oil Prices Retreat: A Breath of Fresh Air for the Economy
Adding to the positive momentum, Brent crude oil prices have seen a considerable decline. After touching an intraday peak of $81.40 per barrel on June 23 amidst escalating West Asia tensions, prices have now softened considerably to approximately $67.87 per barrel. This reduction in energy costs provides significant relief for India, a major oil importer, positively impacting inflation expectations and corporate profitability across various sectors.
Market Experts Weigh In: A Resumption of Uptrend
Seasoned market observers are now pointing towards a sustained upward trajectory for the Indian equities. Ajit Mishra, Senior Vice President (Research) at Religare Broking Ltd., noted, “After consolidating for over five weeks, markets have finally resumed their uptrend, and we expect Nifty to gradually move towards its record high, with a possible pause around the 25,700–25,800 zone.” He highlighted that nearly all key sectors, with the exception of FMCG (Fast-Moving Consumer Goods), are contributing to this rotational rally, signaling broad-based strength.
Broad-Based Gains: Mid and Small Caps Join the Party
Thursday’s trading session commenced on a decidedly positive note, buoyed by stable global cues, and saw momentum build steadily throughout the day. Strong buying interest in select heavyweight stocks across diverse sectors propelled the market higher. The positivity wasn’t confined to large-cap giants; broader indices also registered healthy gains. The Nifty Midcap 100 advanced by 0.59 percent, while the Nifty Smallcap 100 climbed 0.42 percent, indicating an overall expansion of the rally.
Sectoral Spotlight: Metal and Banking Lead the Charge
A remarkable ten out of the thirteen major sectoral indices recorded advances. The Nifty Metal index emerged as a standout performer, gaining a robust 2.3 percent. This sector’s impressive run was significantly bolstered by a weakening US dollar, which makes dollar-denominated commodities more attractive and affordable for global buyers. Gaurav Garg of Lemonn Markets Desk elucidated, “The dollar weakened after US President Donald Trump’s renewed criticism of the Federal Reserve reignited concerns over the central bank’s independence, pressing the greenback and boosting commodity-linked sectors globally.”
The banking sector also demonstrated exceptional strength, with the Nifty Bank index surging 1.03 percent to achieve a new record high of 57,206.70. This remarkable performance was powered by substantial gains in prominent lenders such as HDFC Bank, Axis Bank, ICICI Bank, and IndusInd Bank.
Top Performers and Investor Dynamics
Among the top gainers on the NSE, companies like Shriram Finance (up 3.69 percent), Jio Financial Services (up 3.05 percent), Tata Steel (up 2.56 percent), Bharti Airtel (up 2.54 percent), and Hindalco Industries (up 2.48 percent) led the pack, reflecting diversified investor interest.
Interestingly, Foreign Institutional Investors (FIIs) continued their trend of paring holdings, a move attributed to the narrowing yield spread between U.S. and Indian 10-year bonds. However, this was effectively counterbalanced by Domestic Institutional Investors (DIIs), who emerged as net buyers. Their increased participation was buoyed by improving domestic liquidity conditions and a discernible rebound in consumption within the Indian economy.
Outlook: Rate-Sensitive Sectors Poised for Further Growth
Looking ahead, experts like Religare Broking’s Ajit Mishra continue to express a preference for rate-sensitive sectors. “We continue to favor rate-sensitive sectors such as banking, financials, auto, and realty, while recommending a selective approach for other segments,” Mishra stated, providing a clear roadmap for investors seeking to capitalize on the current market momentum. This targeted approach suggests that while the overall market is on an uptrend, certain segments are particularly well-positioned for sustained growth.
