Sensex gained around 505 points to close at 78,493.54, while Nifty 50 gained 157 points (0.65%) to end the session and the week at 24,353. The sharp gains recorded today added around Rs 5 lakh crore to the total market capitalisation of all companies listed on BSE, pulling it up to nearly Rs 466 lakh crore. Overall, the market gains recorded in April so far added more than Rs 53 lakh crore to the market cap of BSE-listed companies
Hindustan Unilever (HUL) was the top gainer on Sensex, surging nearly 5%. Power Grid, Reliance Industries, Bharat Electronics, Titan, Adani Ports, Tech Mahindra, Kotak Mahindra Bank, State Bank of India (SBI) and others followed, rising more than 1% each. Bucking the trend, Sun Pharma and Mahindra & Mahindra dropped around 1% each to lead losses.
Broader markets continued to outperform benchmarks, with Nifty Smallcap 100 and Nifty Midcap 100 indices gaining over 1% each. This came as India VIX, which measures volatility in markets, declined around 5% to 17.21.
Sectorally, Nifty FMCG soared around 3% to lead gains, while Nifty Metal, Nifty Oil & Gas and others rose around 1% each. Nifty IT was the only sectoral index that closed in the red with marginal losses. While 2,364 stocks advanced on NSE, 894 declined, and 93 remained unchanged.
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Here are 5 key factors which boosted markets today
1) Iran-US war to end soon?
The optimism in markets comes amid rising expectations of the raging war between Iran and the US ending soon. A 10-day ceasefire between Lebanon and Israel took effect, and US President Donald Trump said that officials from Washington and Tehran may meet for talks on the weekend.Additionally, Trump said that Iran has agreed not to possess nuclear weapons for more than 20 years, addressing a major sticking point that has been acting as a major obstacle to earlier attempts to establish peace in the region.
“We’re going to see what happens. But I think we’re very close to making a deal with Iran,” Trump told reporters outside the White House on Thursday. US and Iranian negotiators have scaled back their expectations for a comprehensive peace deal and are instead seeking a temporary memorandum to prevent a return to conflict, two Iranian sources told Reuters on Thursday.
2) Oil prices cool down
Amid the rising expectations of easing conflict and subsequent resumption of trade through the Strait of Hormuz, oil prices cooled down. Brent crude futures dropped more than 3% to trade at $96.35 per barrel in the afternoon. WTI Crude futures tumbled around 4% to trade close to $91 per barrel.
After crossing the crucial $100 per barrel mark in March and remaining above that level for most of the time during that month, oil prices have comfortably fallen below the crucial mark in April so far.
3) FII remain net buyers
Foreign investors remained net buyers of Indian equities for the second consecutive session on Thursday, net purchasing shares worth Rs 382 crore during an extremely volatile session. FII have overall bought Indian equities worth more than Rs 1,048 crore during the two days between April 15-16.
However, the latest purchases by FIIs on Dalal Street are negligible when compared to the massive selloff seen earlier. FIIs have overall remained net buyers for only three out of 31 consecutive sessions. It is now difficult to say whether this marks a decisive change in FII’s behaviour or just the calm before another storm.
4) Rupee spike
Indian rupee extended gains against the US dollar. The Indian currency gained 0.3% to close at 92.9250, after touching a one-week high of 92.66 in early trading. After hitting a record low of 95.21 per dollar on March 30, the rupee has recovered as the RBI tapped crisis-era tools to shore up the currency, which had been battered by foreign portfolio outflows and risks to India’s current account balance during the raging war in the Middle East.
5) Bond yields fall
US bond yields also declined, overall supporting the risk-on sentiment and thereby, markets. The yield on benchmark US 10-year notes dropped to 4.297%, while the 30-year bond yield fell to 4.922%. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell to 3.767%.
Global markets mixed
Indian stock markets remained resilient despite an overall bearish sentiment in Asian markets. Japan’s Nikkei tumbled more than 1% while South Korea’s Kospi declined around 0.6%. Hong Kong’s Hang Seng fell nearly 0.75%.
In Europe, the UK’s FTSE was down marginally while France’s CAC and Germany’s DAX gained around 1%. On the Wall Street, markets closed higher yesterday, with the tech-heavy Nasdaq gaining around 0.4% and the S&P 500 gaining over 0.3%. Dow Jones futures today are in the green.
What lies ahead?
The domestic market closed the day higher, supported by improving prospects of a Middle East resolution and a reversal in FII flows into net buying, said Vinod Nair, Head of Research at Geojit Investments. He added that a ceasefire between Israel and Lebanon helped keep crude below $100/bbl, easing pressure on import-dependent economies. “The rupee strengthened, aided by RBI measures and softening geopolitical tensions. FMCG led gains, driven by price hikes, healthy business updates, and valuation comfort. As the Q4 earnings season gains momentum, results will be a key litmus test for FY27 estimates,” he added.
Earlier during the day, VK Vijayakumar, Chief Investment Strategist at Geojit Investments, had said that a significant and distinct trend in the market is the strength of the mid and smallcaps relative to the large caps. “Fear of FIIs again turning sellers on rallies is weighing on large caps. In the near-term, therefore, the broader market may do better aided by the fund flows and retail buying in the segment. However, the prospects of largecaps are better in the medium to long-term. Investors should monitor Q4 results and management commentary to pick stocks in this results season,” he added.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)