Benchmark equity indices rebounded on Tuesday, recovering part of the previous day’s losses as Brent crude prices retreated to $92.5 per barrel following reports that US President Donald Trump said the war with Iran could end soon. Even the market volatility cooled sharply, with the India VIX index falling 19.07% — its biggest single-day decline in 11 months — to close at 18.91.
Tracking gains in Asian markets, the Sensex jumped 639.82 points or 0.82% to close at 78,205.98, while the Nifty surged 233.55 points or 0.97% to end the session at 24,261.60. Investor wealth increased by Rs 5.94 lakh crore, taking the total market capitalisation of BSE-listed firms to Rs 447.04 lakh crore.
Both the Sensex and Nifty Nifty had declined 1.71% and 1.73%, respectively, on Monday, after Brent crude prices breached the $100 per barrel mark for the first time since September 2022. Across Asia, South Korea led the gains with a 5.35% rise, followed by Japan (up 2.88%), Singapore (up 2.19%), Hong Kong (up 2.17%), and Taiwan (up 2.06%).
What do researchers say?
“Markets reacted positively after US President Donald Trump signalled that the war with Iran could come to an end soon, while warning that Iran would face stronger retaliation if it attempts to block oil flows through the Strait of Hormuz,” said Siddhartha Khemka, Head of Research – Wealth Management at Motilal Oswal Financial Services.
Going ahead, markets are likely to remain sensitive to developments in West Asia and movements in crude prices, while global macro cues will continue to guide overall risk sentiment, Khemka added.
Investor sentiment improved slightly as global markets stabilised and crude oil prices cooled from their recent spike, which had earlier triggered concerns over inflation and economic growth, said Ajit Mishra, SVP – Research at Religare Broking.
What does BSE data suggest?
According to provisional data from the BSE, foreign portfolio investors (FPIs) sold shares worth Rs 4,672.64 crore, while domestic institutional investors (DIIs) bought shares worth Rs 6,333.26 crore.
Market breadth remained positive, with 3,103 gainers against 1,175 losers on the BSE. Outperforming the benchmarks, the BSE MidCap and BSE SmallCap indices rose 1.62% and 2.19%, respectively.
Among sectoral indices, auto, consumer durables, PSU banks, private banks, and financial services were the top performers, rising by up to 3.10%, while IT and oil & gas were the only laggards.
ICICI Bank and HDFC Bank together contributed 338 points, or 53%, of the Sensex’s 640-point gain.
M&M, InterGlobe Aviation (IndiGo), Maruti Suzuki, ICICI Bank, and Asian Paints were the top Sensex gainers, rising by up to 3.67%. On the other hand, Eternal, Infosys, Reliance Industries, Bharti Airtel, and TCS were the top losers, declining by up to 1.50%.