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Sensex, Nifty 50 gain again as ‘oil overhang’ appears to lift on hopes of Iran war ceasefire
India’s valuation premium, which had remained elevated for some time, has corrected to more reasonable levels amid the Iran war.
India's stock market extended gains to a second straight trading session as the “oil overhang” appeared to lift amid prospects of a US-Iran war ceasefire.
The 30-share S&P BSE Sensex rose 1.63%, or 1,205.00 points, to 75,273.45 even as the wider NSE Nifty 50 ended the day 1.72% higher at 23,306.45. All but four Nifty 50 stocks—Tech Mahindra, Power Grid, Tata Consultancy Services and Bharat Electronics—closed in the green. All 16 major indices clocked gains.
The trading session was defined by short-covering and renewed risk appetite.
“Early signs of normalisation in maritime movement through the Strait of Hormuz are likely to support investor confidence, although it may be early to comment,” V.K. Vijayakumar, head of research at Geojit Investments Ltd., said in an emailed statement. “India’s valuation premium, which had remained elevated for some time, has corrected to more reasonable levels—offering investors greater comfort at current market levels.”
The Sensex and Nifty 50 are essentially tracking global markets, which reacted positively to US President Donald Trump's comments that Washington D.C. has presented Tehran a 15-point plan to arrive at a month-long ceasefire. While Iran officially denied direct negotiations but confirmed that “non-hostile” ships can transit the Strait of Hormuz. That cooled the crude oil prices to $100/barrel.
“The talks about a de-escalation are definitely a relief for (Indian) markets, but it will be crucial to see how long it takes for things to normalise,” Pankaj Pandey, head of retail research at ICICI Securities, told Reuters.
The rupee, however, remained under pressure despite the equity rally. The local unit settled near a record low of 93.88 against the US dollar, as persistent foreign portfolio outflows—which have now topped $11.3 billion this month—continued to weigh on the currency.
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Today's gains were led by consumer-durable stocks (up 3.5%). Nifty Auto added 2.2% while InterGlobe Aviation Ltd. (IndiGo) and Larsen & Toubro Ltd. gained 3.5% and 3.8%, respectively. Elsewhere:
- RPSG Ventures (owner of Lucknow Super Giants) skyrocketed 19.2% to close at ₹716.05 following the blockbuster $1.78 billion valuation set by the sale of the RCB franchise to a Blackstone-led consortium. Sun TV also gained significantly, ending up 2.8%.
- The Titan Co. Ltd. emerged as one of the top gainers, rising 5.1% as the drop in global crude oil prices and a stabilising geopolitical outlook raised hopes for stronger discretionary spending.
- HDFC Bank Ltd., the heaviest stock on Nifty 50, rose 2.3% after external law firms were appointed to investigate the resignation of part-time chairman Atanu Chakraborty. That pushed Nifty Bank higher by 2.3% — the biggest gain in nearly seven weeks.
- Nifty IT sector was the primary drag, with Tech Mahindra Ltd. and Infosys Ltd. ending the day in the red, as concerns over a potential slowdown in discretionary spending offset the local bullishness.
India's equity, debt and currency market will be closed on Thursday to mark the local festival of Ram Navami. Trading will resume on Friday.
