Mumbai, April 8 – The Sensex and Nifty benchmark indices traded sharply higher on Wednesday afternoon, in line with a strong rally in global markets and a drop in crude oil prices following the announcement of a two-week ceasefire by the US and Iran.
The 30-share BSE Sensex jumped 2,988.82 points or 4%, closing at 77,605.40. The 50-share NSE Nifty surged 890.35 points or 3.85%, closing at 24,014.
Among the 30 Sensex companies, InterGlobe Aviation saw the biggest gains, up nearly 10%. Larsen & Toubro, Bajaj Finance, Maruti, UltraTech Cement, and Mahindra & Mahindra were also among the top gainers.
Tech Mahindra, Sun Pharma, and Power Grid were the laggards.
Brent crude, the global oil benchmark, fell 13.70% to $94.44 per barrel.
"The key trigger is the announcement of a two-week pause in US military action, along with Iran's agreement to facilitate safe passage through the Strait of Hormuz. This has significantly reduced immediate concerns about energy supply disruptions, which had been a major overhang for global markets," said Hariprasad K, Research Analyst and Founder, Livelong Wealth.
He further added that the easing of geopolitical tensions has led to a sharp fall in global crude oil prices, which is particularly positive for India from both inflation and currency perspectives.
Meanwhile, the Reserve Bank of India kept its key policy rate unchanged on Wednesday, adopting a cautious wait-and-see stance as policymakers assessed the fallout from the six-week Iran conflict on energy supplies, inflation, and growth.
The central bank's six-member Monetary Policy Committee voted unanimously to keep the benchmark repurchase rate at 5.25%, citing heightened uncertainty after the West Asia conflict drove crude prices sharply higher, weakened the rupee, and disrupted trade flows.
"The RBI MPC meeting outcome largely aligned with expectations, with both rates and stance maintained given the ongoing geopolitical uncertainty," said Naval Kagalwala, COO & Head of Products, Shriram Wealth Ltd.
In Asian markets, South Korea's benchmark Kospi surged nearly 7%, and Japan's Nikkei 225 index jumped over 5%. The SSE Composite index and Hong Kong's Hang Seng index also recorded sharp rallies.
US markets ended flat on Tuesday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 8,692.11 crore on Tuesday, according to exchange data. Domestic Institutional Investors (DIIs), however, bought stocks worth Rs 7,979.50 crore.
On Tuesday, the Sensex jumped 509.73 points or 0.69%, closing at 74,616.58. The Nifty climbed 155.40 points or 0.68%, closing at 23,123.65.
