Market Midday Report: Sensex Up 2800 pts, Nifty Climbs 800 pts on Ceasefire News 

Mumbai, April 8: Indian equities kept up its bullish momentum on Wednesday’s midday trade after the opening rally in the morning session with benchmark indices Sensex and Nifty breaching new records on eased global geopolitical tensions. The benchmark BSE Sensex soared by 2,818.49 points or 3.78% to 77,435.07, while the NSE Nifty 50 climbed by 839.50 points or 3.63% to 23,963.15.

The stunning rally on Dalal Street today can be attributed to the de-escalation in the Middle East overnight after news agency Reuters reported that the US and Iran have agreed to a two-week ceasefire mediated by Pakistan. The truce has effectively eliminated the risk of a full-fledged war in the Strait of Hormuz, which has led to an improved risk sentiment and “relief rally” on Dalal Street.

BSE Top Gainers

The top gainers on the BSE include Shriram Finance, which jumped 10.13%, followed by InterGlobe Aviation (IndiGo) that gained 9.75% on a dip in fuel cost worries. Shares of Adani Enterprises added 8.05% to their value, while Tata Motors (TMPV) and Larsen & Toubro rose 7.99% and 7.72% respectively, extending the recovery in capital goods and auto sectors.

In contrast, the list of losers is also thin with Coal India being the top loser with a loss of 3.25%. Shares of ONGC fell 1.94% as the truce has reduced the risk premium on domestic energy producers. Tech Mahindra lost 1.17% while defensive plays Nestle India and Sun Pharma are trading marginally lower, down by 0.79% and 0.72% respectively, as investors book profit in safe-havens and rotate into high-beta stocks.

Nifty Realty Index

Sectorally, the Nifty Realty index is the top performer, up by over 7% while the Auto sector gained 6.87% on easing input cost concerns. The Financial Services sector also advanced by 5.25% in the aftermath of the RBI’s monetary policy. On the other hand, the CPSE index is one of the few losing sectors on the exchange, down by 0.39% as government-owned energy companies witnessed selling pressure. IT and Pharma sectors are also among the laggards, rising only 0.43% and 0.54% respectively and underperforming the broader market’s vertical move.

Asian markets are also rallying for the most part with most major indices on the region trading in the green. Nikkei 225 of Japan was the top performer, rising 4.96% followed by Hang Seng Index of Hong Kong that jumped 2.70%. S&P ASX All Ordinaries of Australia rose 2.84% and Shanghai Composite added 1.77%. JSX Composite of Indonesia is one of the few markets in the region that is trading in the red, down by 0.26%, while KSE 100 and Thailand’s SET Index are still in the green as the truce between the US and Iran increases the hope of global energy stability.

RBI Wait and Watch

At home, the Reserve Bank of India (RBI) has decided to err on the side of caution by keeping the repo rate on hold at 5.25%. In a statement, RBI Governor Sanjay Malhotra said that the Monetary Policy Committee (MPC) “unanimously decided to keep the policy repo rate unchanged at 5.25 per cent to support growth and maintain a ‘wait and watch’ stance”. This status quo decision means that the RBI is adopting a neutral stance on monetary policy as global geopolitical risks continue to shift between the US and Iran.

Crude oil prices have started to stabilise after overnight news that the US and Iran had agreed to a two-week ceasefire, easing fears of supply disruption due to a military conflict between the two nations. A truce in the Strait of Hormuz ensures the safe passage of oil tankers in the region, cooling speculative heat in the energy markets. As a result, Brent crude is trading lower, which is bullish for India’s inflation and trade deficit outlook.

Gold prices are also in focus as the “safe-haven” demand among investors cools slightly. On the domestic front, 24K gold is currently trading at ₹15,382 per gram and 22K gold is quoted at ₹14,100 per gram.

Sources:

• BSEIndia.com
• NSEIndia.com