Dalal Street opened sharply higher with broad-based gains as easing crude prices and global cues boosted sentiment, while investors tracked geopolitical developments and upcoming corporate earnings.
Indian stock markets (photo IANS)
Indian equity markets opened on a strong note on Wednesday, mirroring a global rally as signs of easing tensions in West Asia and softer crude oil prices lifted investor confidence.
The surge came as hopes of progress in US-Iran negotiations helped calm fears of a prolonged conflict, with Brent crude slipping to around $93 a barrel. The drop in oil prices eased concerns over a potential energy shock, giving markets a clear boost.
Advertisement
In early trade, the Nifty 50 advanced 1.4 per cent to 24,178.50, while the BSE Sensex climbed 1.5 per cent or 1,112.44 points to 77,945.15. Gains were broad-based, with all sectoral indices trading in positive territory. The Nifty IT Index emerged as the top performer, rising 2.6 per cent to 31,459.00.
Advertisement
The upbeat start was supported by strong overnight cues from the United States. The Nasdaq rose 2 per cent, while the S&P 500 gained 1 per cent and hovered near record closing levels, driven by optimism around a possible resolution in the Middle East along with supportive earnings and inflation data.
Asian markets also opened higher, tracking Wall Street’s gains, while Indian stock futures indicated continued upward momentum.
Market expert Ajay Bagga summed up the current sentiment, saying investors are being guided more by sentiment than fundamentals. “Markets are currently operating on a diet of ‘geopolitics and vibes,’ where optimism about a second round of peace talks is single-handedly offsetting the friction of a naval blockade,” he said. He noted that both WTI and Brent crude declined after US President Donald Trump indicated the conflict may be nearing an end.
Even as markets rallied, underlying risks remain. Bagga pointed out that the US naval blockade targeting Iranian ports continues to remain in place. “While a two-week ceasefire is technically holding, the Strait of Hormuz remains a primary risk factor for global energy security,” he said.
A high-level conversation between Prime Minister Narendra Modi and US President Donald Trump on Tuesday also contributed to the positive sentiment. Both leaders emphasised the importance of keeping the Strait of Hormuz open for global trade, while discussing broader issues related to West Asia stability and bilateral ties.
Sunny Agarwal of SBI Securities said the near-term outlook remains positive, supported by easing geopolitical tensions and lower crude prices. “It should be a good day for the Indian stock markets as the investor sentiment will be buoyed by progress in negotiations between the US and Iran as the conflict came to a halt and got a two-week window,” he said.
He added that lower oil prices, a stronger rupee and easing inflation could support equities going forward, with sectors such as real estate and automobiles likely to remain in focus.
Agarwal also noted that company-specific earnings will influence market direction in the coming sessions. Additionally, a weaker-than-average monsoon forecast could benefit companies selling summer products, as demand for air conditioners and cooling appliances may rise.
Investors appear to be factoring in the possibility of a diplomatic resolution. As Bagga explained, “If the second round of talks in Pakistan or Geneva materialises, expect oil to test the $90 support level. If they stall, the Hormuz blockade will once again take center stage.”
Advertisement
