India’s stock market rose for a second straight session today, joining a broader Asian relief rally as crude oil prices fell below $100 a barrel on signs of an Iran ceasefire.
The 30-share S&P BSE Sensex rose 2.40% or 1,781.31 points to 75,230.06, while the broader NSE Nifty 50 rose 2.41% to breach 23,400. The rally was broad-based, with 15 of the 16 major sectoral indices posting gains. Small-cap and mid-cap stocks outperformed the benchmarks, gaining 2.7% and 2.2% respectively.
The primary catalyst for risk-on sentiment was the perceived change in US foreign policy. On Tuesday, President Donald Trump indicated that progress was being made toward a negotiated solution in the Middle East. Reports suggest the US has offered Tehran a 15-point plan aimed at a one-month ceasefire, which would provide much-needed relief to global energy markets.
International benchmark Brent crude fell 4.4% to trade near $99.89 a barrel. For India, which imports more than 80% of its oil requirements, the decline in energy prices acts as a massive headwind for corporate margins and fiscal sustainability.
“Hope is returning to the market with signs of de-escalation in the conflict. Comments from Trump and the Iranian regime suggest the conflict may end soon,” VK Vijayakumar, chief investment strategist at Geojit Investments, said in an email. “These positive geopolitical developments have been reflected in a sharp decline in Brent crude to around $98.”
Despite the optimism, some analysts urged caution. While Tehran has indicated that “non-hostile ships” can transit the vital Strait of Hormuz, Iranian officials have officially denied that direct talks are currently underway.
FII vs DII
This improvement comes against the backdrop of a historic selloff by foreign investors. Foreign institutional investors (FIIs) have sold about $11.37 billion in Indian stocks so far in March, the highest monthly disinvestment on record. On Tuesday alone, exchange data showed that FIIs made net withdrawals ₹8,009 crores.
However, domestic institutional investors (DIIs) are picking up the slack. they bought ₹Shares worth Rs 5,867 crore were sold yesterday.
“Dollar buying syndrome remains a factor,” Anil Kumar Bhansali, head of treasury, Finrex Treasury Advisors, told PTI. “Foreign fund outflows amid the West Asia crisis continued to weigh on the rupee, which fell 18 paise to 93.94 against the dollar today.”
Stocks in focus today
HDFC Bank: Shares rose 2.1% after India’s largest private lender hired outside law firms to dig into the minutes of board meetings to find out the reason for the resignation of part-time chairman Atanu Chakraborty, continuing its recent winning streak.
IPL Franchise Owners (Sun TV and RPSG Ventures): Sports-linked stocks witnessed a massive re-rating after a consortium including Blackstone and Aditya Birla Group agreed to buy the Royal Challengers Bangalore (RCB) franchise from United Spirits for $1.78 billion. RPSG Ventures (Lucknow Super Giants) skyrocketed 15.6%. Sun TV (Sunrisers Hyderabad) rose 2.5%.
Giants: Mahindra & Mahindra, UltraTech Cement and Adani Ports top the list of Sensex gainers as investors turned to cyclicals and infrastructure.
backward: The IT sector remained under pressure, with Tech Mahindra and Infosys turning positive as concerns over discretionary spending persist.
market Outlook
As the end of the financial year approaches, market participants are now looking towards the Reserve Bank of India (RBI). Traders expect the central bank to intervene in the currency market to stabilize the rupee, with some predicting a pullback to the 92.80 level if geopolitical tensions continue.
For now, the trajectory of the Nifty 50 largely depends on whether oil holds the $100 per barrel mark or not. Analysts believe that if the 15-point ceasefire plan gains momentum, India’s stock market could recover a significant portion of its 7.6% monthly loss.
