Most global equity indices rallied on Friday after fresh reports indicated that the US and Iran were moving closer to a deal to end their conflict. According to a Bloomberg report, the two countries are nearing an agreement that could lead to the reopening of the Strait of Hormuz, while leaders of the Group of Seven (G7) nations are set to meet next week. The developments eased geopolitical tensions and pushed Brent crude prices down by as much as 5.1 per cent to $85.8 per barrel.
Recording their biggest single-day gains in two months, the Indian benchmark equity indices surged sharply. The Sensex soared 1,695.40 points, or 2.30 per cent, to close at 75,527.95, while the Nifty jumped 461.30 points, or 1.99 per cent, to settle at 23,622.90.
Investors gained Rs 9.7 lakh crore in notional wealth as the total market capitalisation of BSE-listed companies surged to Rs 462 lakh crore.
On a weekly basis, the Sensex and Nifty rose 1.73% and 1.10% respectively, snapping two week’s losing run.
Independent market expert, Ambareesh Baliga said, while the geopolitical situation keeps changing, he hoped that the conflict may end soon. Banking sectors have done well based on the expectations of an end to the conflict, Baliga added. He believes that the end to the conflict may lead to a reversal in oil prices, lowering of inflation and appreciation of rupee with the hopes of FIIs coming back.
“A likely peace solution to the ongoing war between the US and Iran over the next few days fuelled a massive rally and pushed oil prices below the $90 per barrel mark,” said Ankur Punj, MD & Business Head at Equirus Wealth.
Strong global market recovery triggered broad-based buying support, while a sharp recovery in the rupee against the dollar also aided sentiment, added Punj.
Market breadth remained firmly positive, with 3,222 gainers against 1,046 losers on the BSE. Outperforming the benchmarks, the broader BSE MidCap and BSE SmallCap indices advanced 2.39%and 2.82%, respectively.
All sectoral indices on the BSE ended in the green, while on the NSE, all sectoral indices except the Nifty IT index closed higher. Realty, financial services, private banks, PSU banks, and consumer durables emerged as the top gainers.
HDFC Bank alone contributed 358 points, accounting for over one-fifth of the Sensex’s 1,695-point gain. L&T, Reliance Industries, ICICI Bank, and Bajaj Finance together added another 610 points, contributing 36 % to the rally. Barring two stocks, all Sensex constituents ended higher. Bajaj Finance, L&T, InterGlobe Aviation (IndiGo), Titan Company, and HDFC Bank were the top gainers among Sensex stocks.
Foreign portfolio investors (FPIs) sold shares worth Rs 1,082.18 crore ($114 million), while domestic institutional investors (DIIs) bought shares worth Rs 5,341.29 crore, according to provisional BSE data.
Across Asia, South Korea led the gains with its benchmark index rising 4.63 per cent, followed by Japan (up 2.81 per cent) and Taiwan (up 2.36 per cent). Major European equity indices were also trading higher by up to 2 per cent (at 7:30PM IST).
(with inputs from Kushan Shah)