Sensex today: Indian benchmark indices opened higher on Monday, tracking a rally in global markets after the United States and Iran finalized a deal to end their 107-day war and reopen the Strait of Hormuz, easing concerns over global oil supplies.
In early trade, BSE Sensex rose 1,197.32 points or 1.59 per cent to 76,725.27, while NSE Nifty rose 361.95 points or 1.53 per cent to 23,984.85.
The upbeat start came after US President Donald Trump announced that Washington and Tehran had finalized a deal to end the conflict and reopen the Strait of Hormuz, a key shipping route through which about a fifth of the world’s oil supply passes. The agreement is expected to be formally signed in Switzerland on June 19.
Asian shares rose 2.4 percent after the announcement, while Brent crude oil prices fell 4.1 percent to about $84 a barrel, the lowest level since March.
Low crude oil prices boost the outlook for India
The fall in oil prices is seen as a major positive for India, the world’s third-largest oil importer, as it helps ease inflationary pressures, supports the rupee and improves the country’s trade deficit.
“Diplomatic resolution in the Middle East reduces geopolitical risks, and the fall in crude oil price is particularly beneficial for India, as it eases inflation pressures and improves the macroeconomic outlook,” said Pravesh Gaur, senior technical analyst at Swastika Investmart.
Investors are also expected to focus on sectors that benefit from lower fuel costs. Buying interest could be seen in oil marketing companies, airlines, tire makers and paint manufacturers during the session.
Among individual stocks, Dr Reddy’s Laboratories will be in focus after it announced the first-time market launch of Bosulif, a drug used to treat chronic myeloid leukemia, in the US market. Aurobindo Pharma may remain under pressure after the US Food and Drug Administration classified its Yuzea Pharma manufacturing facility in Telangana as “indicating official action” following an inspection.
Last week’s gains continue in the market
Monday’s rally extends the positive momentum of last week, when the Sensex rose 1,284.61 points or 1.73 per cent and the Nifty gained 256.2 points or 1 per cent.
According to market experts, investor confidence improved due to optimism over a possible US-Iran peace deal and supportive measures announced by the Reserve Bank of India to attract foreign exchange inflows.
The broader market was also supported by strong gains among India’s most valued companies. Eight of the top 10 most valuable companies were combined ₹The market capitalization last week stood at Rs 1.90 lakh crore, led by ICICI Bank. HDFC Bank, State Bank of India, Bharti Airtel, Bajaj Finance, Larsen & Toubro, Hindustan Unilever and Reliance Industries also registered gains.
Despite Friday’s gains, foreign portfolio investors remained net sellers and offloaded stocks ₹10.82 billion. However, domestic institutional investors bought equities worth ₹53.41 billion, according to provisional exchange data.
