By Our Business Correspondent
Domestic equity benchmarks staged a sharp rally on Wednesday, supported by improving investor sentiment amid growing optimism over a potential diplomatic breakthrough between the United States and Iran. Positive global cues and a steep fall in crude oil prices further lifted market confidence.
Benchmark indices opened on a strong note, tracking gains across Asian and European markets. Brent crude prices slipped below the $105-per-barrel mark as geopolitical tensions showed signs of easing, while the Indian rupee strengthened to hover near the 94-per-dollar level.
The BSE Sensex surged 940.73 points, or 1.22%, to close at 77,958.52, while the Nifty 50 advanced 298.15 points, or 1.24%, to settle at 24,330.95. Banking stocks led the rally, with strong buying interest in frontline lenders. Almost all sectoral indices ended in positive territory, except FMCG.
Among key gainers, State Bank of India, HDFC Bank and ICICI Bank provided significant support to the indices. Broader markets also participated in the uptrend, with midcap and smallcap indices rising over 1.5% each, indicating widespread buying interest.
Market breadth remained firmly positive, with advancing stocks significantly outnumbering declines on the BSE. Meanwhile, the India VIX, a measure of market volatility, declined sharply, reflecting reduced investor anxiety.
Global Tailwinds and Oil Slide
Investor sentiment was buoyed by reports suggesting progress in negotiations between Washington and Tehran. A potential framework agreement aimed at easing tensions in the Middle East raised hopes of improved global stability and uninterrupted oil supplies.
The decline in crude prices provided relief to import-dependent economies like India, easing inflation concerns and improving macroeconomic outlook.
Global markets mirrored the positive sentiment. Asian and European indices closed higher, while US futures संकेतित a strong opening for Wall Street. Earlier, US equities had ended on a firm note, supported by strong corporate earnings and softer oil prices.
Domestic Economy Signals Strength
On the macroeconomic front, India’s services sector continued to show robust momentum. The HSBC Services PMI rose to 58.8 in April, marking the fastest expansion in several months, driven by strong demand and increased business activity.
The Composite PMI also indicated sustained growth in overall private sector output, reflecting resilience in the domestic economy despite global uncertainties.
Currency, Bonds and Commodities
In the currency market, the rupee strengthened against the US dollar, supported by easing crude prices and improved capital flows. Bond yields declined, indicating stable interest rate expectations.
Gold prices moved higher amid global uncertainty, while the US dollar index weakened slightly. Crude oil witnessed a sharp correction, further boosting investor sentiment.
Stocks in Focus
Aviation stocks gained after the government approved an expanded credit support scheme for sectors impacted by the West Asia conflict. IT and pharma stocks also saw selective buying following strong earnings announcements.
Among notable movers, Coforge surged on robust quarterly results, while Ajanta Pharma gained on healthy earnings growth. Realty and renewable energy stocks also attracted investor interest.
However, some stocks such as Larsen & Toubro saw mild declines despite reporting higher revenues, indicating selective profit booking at higher levels.
Outlook
Market participants are expected to closely monitor developments on the US–Iran front, crude oil price trends, and global economic cues. Sustained foreign inflows and domestic economic strength could continue to support market momentum in the near term.
Disclaimer: This report is for informational purposes only and should not be construed as investment advice. Investors are advised to consult certified financial advisors before making any investment decisions.