Stock markets bounced back on Thursday, with the Sensex rising over 400 points and the Nifty reclaiming the 24,000 mark, even as tensions between the US and Iran remained elevated and crude oil continued to trade close to $79 per barrel.
As of 9:40 am, the BSE Sensex was trading 516.15 points higher, or 0.67%, at 77,019.75, while the NSE Nifty50 gained 139.90 points, or 0.59%, to trade at 24,021.95.
The recovery comes just a day after Dalal Street witnessed its biggest single-day decline in three months, when the Sensex and Nifty lost more than 2% following fresh military action by the US in Iran and comments by US President Donald Trump that fuelled fears of a wider conflict in the Middle East.
WHY ARE MARKETS RISING TODAY?
Markets had plunged more than 2% on Wednesday after fresh US strikes on Iran and US President Donald Trump’s remarks that the ceasefire arrangement was “over” triggered fears of prolonged disruption in the Middle East.
Those concerns sent crude prices sharply higher and led to panic selling across global equity markets.
However, Thursday’s rebound suggests investors believe the worst-case scenario has not materialised yet.
According to market experts, crude prices near $79 are uncomfortable but still manageable for India. More importantly, futures markets do not indicate that oil prices are likely to spiral beyond $100, unless the Strait of Hormuz faces another disruption.
The sharp correction seen on Wednesday also created an attractive buying opportunity in large-cap stocks, prompting investors to return to the market.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said, “Geopolitics has again played spoilsport with the Indian market, which has been slowly strengthening. President Trump’s statement that the ceasefire with Iran is over triggered sharp selling in the market shaving off 516 points from the Nifty, which is almost 50% of the recent gains.”
He added that the current crude oil prices are not yet a major concern.
“Brent at $80 is not a problem. It won’t create a balance of payments crisis. The crisis will re-emerge only if the tensions lead to the closure of the Strait of Hormuz again and consequently crude spiking above $100. The present futures do not reflect such a pessimistic scenario,” Vijayakumar said.
He also pointed out that foreign institutional investors continue to support Indian equities.
“During the last four trading days, FIIs have been buyers in India. They have bought equity worth Rs 3,954 crore in the cash market. This trend may continue if crude remains stable. Large caps generally, and financials and automobiles in particular, are likely to remain resilient,” he said.
MARKET BREADTH REMAINS STRONG
The recovery was broad-based across the market.
Among broader indices, the Nifty Smallcap 100 gained 1.03%, the Nifty Midcap 50 rose 0.97%, the Nifty Midcap 100 added 0.95%, the Nifty MidSmall Financial Services index climbed 0.95%, the Nifty 500 advanced 0.68%, the Nifty 200 gained 0.64% and the Nifty 100 rose 0.57%. India VIX, the market’s fear gauge, fell over 7%, indicating easing volatility after Wednesday’s sharp spike.
Among sectoral indices, Nifty Consumer Durables emerged as the top performer, gaining 1.91%, followed by Nifty Realty, up 1.34%. Nifty Private Bank rose 0.90%, Nifty MidSmall Healthcare gained 0.90%, Nifty Chemicals advanced 0.83%, Nifty PSU Bank climbed 0.77%, Nifty Media gained 0.75%, Nifty Financial Services 25/50 rose 0.68%, Nifty Pharma added 0.69%, Nifty Healthcare Index gained 0.66%, Nifty FMCG rose 0.62%, Nifty Auto advanced 0.55%, Nifty Financial Services Ex-Bank gained 0.59% and Nifty Oil & Gas edged up 0.38%.
The only notable laggard remained the Nifty IT index, which slipped 1.46% as investors continued to book profits ahead of Tata Consultancy Services’ June-quarter earnings later in the day. Nifty MidSmall IT & Telecom was also marginally lower.
TOP GAINERS AND LOSERS ON SENSEX
Among Sensex stocks, Eternal was the top gainer, rising 3.47%, followed by Sun Pharma, Titan, Bharti Airtel, ICICI Bank, Asian Paints, Trent, Larsen & Toubro, HDFC Bank, Power Grid, UltraTech Cement and BEL.
On the losing side, Infosys fell over 2%, while HCLTech, TCS and Tech Mahindra also remained under pressure, weighing on the IT pack.
The rupee opened at 95.55 against the US dollar, almost unchanged from the previous close of 95.5550, providing additional support to investor sentiment.
