Trading at the Bombay Stock Exchange and the National Stock Exchange will stay shut on March 26 due to the Ram Navami holiday. Markets extended their recovery for the second consecutive session on Wednesday, supported by easing geopolitical tensions, a decline in crude oil prices (now trading below $100 per barrel), and emerging hopes of a potential de-escalation in the ongoing US–Iran conflict. However, the rupee continued its downwards journey, falling to fresh lows of 93.98 to a dollar.
The Sensex opened on a firm note, tracking positive global cues, and witnessed steady buying for most of the session. It hit an intraday high of 75,849.76, rising 1,781.31 points, or 2.40%. However, marginal profit booking in the final hours trimmed gains, with the index eventually settling at 75,273.45, up 1,205 points, or 1.63%.
The Nifty also climbed 2.41% (552.95 points) to an intraday high of 23,465.35, before closing at 23,306.45, gaining 394.05 points, or 1.72%. On Tuesday, the Sensex and Nifty had risen 1.89% and 1.78%, respectively.
“Investor sentiment improved significantly amid reports that discussions between the US and Iran could begin, helping cool crude oil prices below the $100 mark,” said Ajit Mishra, SVP – Research, Religare Broking.
However, despite the rebound, the India VIX remained elevated, indicating continued caution amid persistent FII outflows and weakness in the rupee, Mishra added. The India VIX Index eased marginally by 0.4% to close at 24.64.
Wealth Rebound
Investors’ wealth rose by Rs 15.8 lakh crore over the past two sessions, including Rs 8.23 lakh crore gained on Wednesday alone. Total market capitalisation on the BSE increased from Rs 415.21 lakh crore on March 23 to Rs 431.02 lakh crore on March 25.
Foreign portfolio investors sold shares worth Rs 1,805.37 crore, while domestic institutional investors bought shares worth Rs 5,429.78 crore, as per provisional BSE data.
Currency Crisis
The continued sale by FPIs was reflected in the Indian rupee that weakened by 10 paise to close at 93.97 against the dollar on Wednesday, according to Bloomberg. During intraday trade, it touched a record low of 93.98.
“Strong dollar demand from oil importers, FPI outflows, and month-end requirements put pressure on the rupee. Non-deliverable forward (NDF) maturities added to the pressure. Despite oil prices falling below $100 per barrel, the rupee saw little relief due to sustained demand and only a modest decline in India’s oil basket,” said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP.
Currency traders noted that the Reserve Bank of India’s (RBI) dollar sales in the spot market helped prevent the rupee from breaching the 94 mark.
So far in the current financial year, the rupee has depreciated 9.96%, marking its worst performance in 12 years. It continues to be the worst-performing currency among its Asian peers.
Bhansali expects the rupee to remain supported above 94 in March, with potential appreciation towards 93.30. However, divergent signals from the US and Iran are adding to uncertainty, he said.
For the stock markets, the overall market breadth remained positive for the second consecutive session, with 2,956 gainers against 1,360 losers on the BSE. The broader BSE Midcap and BSE Smallcap indices surged 2.39% and 2.30%, respectively. On Tuesday, both indices had gained 2.42% each.
All sectoral indices on the BSE and NSE ended in the green for the second straight session. Consumer durables, realty, PSU banks, metals, and financial services were among the top gainers, advancing by up to 3.51%.
HDFC Bank, L&T, SBI, Bharti Airtel, and Bajaj Finance together contributed 599 points, or 50%, to the Sensex’s 1,205-point gain.
UltraTech Cement, Bajaj Finance, L&T, Titan Company, and IndiGo were the top Sensex performers, rising by up to 4.39%, while Tech Mahindra, Power Grid, TCS, and BEL were among the laggards, declining by up to 1.66%.