Indian Stock Markets Extend Gains on Positive Global Sentiment
Indian equity benchmarks, the Sensex and Nifty50, maintained their upward momentum on Thursday, fueled by encouraging global market trends and rising hopes for an early conclusion to the US-Iran conflict. The Nifty50 index surpassed the 24,350 threshold, while the BSE Sensex climbed more than 400 points during early trading hours.
Market Performance and Key Levels
At 9:16 AM, the Nifty50 was trading at approximately 24,357.25, marking a significant increase of 126 points or 0.52%. Simultaneously, the BSE Sensex reached 78,573.80, up by 463 points or 0.59%. This sustained rally reflects a constructive near-term outlook, as highlighted by market analysts.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, provided insightful commentary on the market dynamics. "It has been 47 days since the war began. What is the message from the markets? Brent crude has declined to the $95 level from a recent peak of $119. The S&P 500 set a new record yesterday at 7022, and the Nasdaq also reached a new high. The signals from both the crude market and the US stock market suggest that the West Asian conflict is unlikely to persist for an extended period. The stock market is already factoring in an early resolution to the conflict," he explained.
Domestic Market Resilience and Sectoral Trends
In India, the Nifty has demonstrated remarkable resilience, rebounding from a 12% correction following the onset of the war. The index has surged by approximately 2000 points from the lows observed around March 30th. A notable trend is the outperformance of mid and small-cap stocks compared to large caps.
"The small-cap index is slightly above pre-war levels, and the mid-cap index is only marginally lower by around 0.5%, whereas the Nifty remains down by about 3.8% from pre-war levels. This underperformance of large caps can be attributed to significant selling by Foreign Institutional Investors (FIIs). The broader market's outperformance is expected to continue in the near term," Dr. Vijayakumar added.
He further advised investors to monitor stocks that are hitting 52-week highs even in a weak market environment. "Such stocks reflect fundamental strength and accumulation by smart money," he emphasized.
Supportive Global Cues and Market Drivers
Global market conditions remained favorable, with Asian markets following the gains on Wall Street. This optimism was buoyed by hopes of a potential ceasefire in the Middle East and robust corporate earnings reports. The MSCI Asia Pacific Index rose by 0.4% at the open on Thursday, as investors anticipated that easing geopolitical tensions could moderate oil prices and bolster global economic growth.
In the United States, both the S&P 500 and the Nasdaq 100 closed at record highs on Wednesday. This rally was driven by improved risk sentiment and positive earnings from major financial institutions, including Bank of America and Morgan Stanley. US President Donald Trump remarked that the conflict involving Israel was "close to over," with the White House expressing optimism about a potential agreement.
However, industry sources cautioned that traffic through the Strait of Hormuz, a critical conduit for global oil and gas shipments, remains substantially below normal levels. Despite this, oil prices edged lower in early Thursday trading, as optimism surrounding easing tensions outweighed concerns over supply disruptions.
Domestic Institutional Activity
On the domestic front, foreign portfolio investors were net buyers of equities worth Rs 666 crore on Wednesday. Domestic institutional investors also provided support, with net purchases amounting to Rs 569 crore, reinforcing the positive sentiment in the Indian markets.
