Indian Markets Firm at Midday; Gains Tempered by Iran Ceasefire Jitters 

Mumbai, April 20: Indian stock markets continued trade with healthy gains at noon on Monday riding over late Sunday’s geopolitical concerns. At 11: 50 am, BSE Sensex traded higher by 413.11 points or 0.53% to 78,906.65. Nifty 50 traded up by 108.40 points or 0.45% to 24,461.95 at 11:49 am.

As many as 46 out of the 50 Nifty constituents traded with gains. Stocks from banking, energy and consumer sectors were major contributors to the rise. Nevertheless, the cautious undertone remained the same as both Sensex and Nifty opened up sharply higher before trimming gains. This largely came on account of investor concern that weighed on market as Iran-US ceasefire deal appeared very fragile as tensions continue to simmer ahead of the May 12 deadline. With talks all but deadlocked currently, markets today would find it difficult to ignore geopolitical tension amid rebounding domestic bullish sentiment.

Top Gainers

Nifty-packaged retailer Trent was the top gainer of the day so far, touching an intra-day high of ₹4,262.20 and last traded at ₹4,252.90 against its previous close of ₹4,107.70, up 3.53%. SBI touched an intra-day high of ₹1,120.95. Its last traded price was ₹1,115.95 as compared to previous closing price of ₹1,080.25, up 3.30%. JSW Steel also gained sharply, hitting a high of ₹1,270.50. It was trading at ₹1,270.10 versus its previous closing price of ₹1,240.30, up 2.40%. Shares of Asian Paints hit a high of ₹2,507.50. It was trading at ₹2,505.80 as compared to previous close of ₹2,464, up 1.70%. Eternal gained 1.63% with a high of ₹256.99 and last traded at ₹256.73 against its previous close of ₹252.61.

Laggards

Hindalco was the worst performer on the Nifty, falling to an intra-day low of ₹1,011.40. It was trading at ₹1,018.70 against its previous close of ₹1,039, down 1.95%. Jio Financial Services slipped to ₹234.50 at its intra-day low with its LTP at ₹239.13, down 1.94% from its previous closing price of ₹243.86. HDFC Life hit a low of ₹605.35. It was trading at ₹609.60 against its previous closing price of ₹618.91, down 1.11%. L&T’s intraday low was ₹4,064.20. It traded at ₹4,068.10 versus its previous closing price of ₹4,096.10, down 0.68%. Finally, Wipro dipped to ₹202.51 at its low of the day. It was trading at ₹203.16 versus previous close of ₹203.92, down 0.57%.

Oil prices spiked again during Monday trade amid simmering Iran-U.S. tensions. Brent crude futures traded around 5% higher at just below $95 a barrel, while West Texas Intermediate crude futures hovered near $89 a barrel after rising to the highest since November 2014 during the previous session. In Iran, conflicting messages from U.S. and Iranian officials over negotiations towards a ceasefire between Tehran and Washington rattled energy markets yet again, especially after reports of attacks on commercial tankers at the Strait of Hormuz suggested rising risk of disruption to supply from the crucial waterway.

Benchmark Brent crude was up by around 5% near $95 per barrel while WTI crude futures rose towards $89 a barrel. Trump, on Sunday told reporters that Iran appeared to be standing down from military conflict and “we’ll see what happens”, while Iran’s supreme leader Ayatollah Ali Khamenei rejected attending talks ahead of Tuesday’s deadline.

For India, that imports more than one-third of its oil requirements, higher crude prices pose significant threat. Not just to CAD but also push up inflation further.

Rupee Vs Dollar

Indian rupee too continued to trade with mild losses on Monday morning. The domestic currency dipped 2 paise to 92.95 against the US dollar in morning trade from its previous close of 92.93, after opening 10 paise higher at 92.85. Rupee which opened with mild gains failed to build on it as dollar buying from oil marketing companies coupled with firmer greenback put stop to any meaningful rebound. RBI has enacted several measures to limit volatility due to COVID-19 but rupee remains susceptible to slide further on crude selling.

Update on Geopolitical Tensions

Iran-U.S tensions escalated further on Monday morning. The US military stated that it seized an Iranian cargo vessel that tried to cross its naval blockade at the mouth of the Persian Gulf port city of Bandar Abbas on Sunday, Trump tweeted early Monday that the U.S. was “now in custody of the Iranian oil tanker”. Iranian military stated it would respond swiftly to the seizure and Supreme Leader Ayatollah Ali Khamenei rejected attending peace talks before Tuesday deadline.

For India markets today, Strait of Hormuz would remain the focal point. Strait which accounted for around one-fifth of world’s oil trade before tensions escalated between Iran and US remains closed amid heightened geopolitical risks.

Source:

• www.bseindia.com
• https://www.nseindia.com/market-data/top-gainers-losers