Mumbai, April 6 – Benchmark indices Sensex and Nifty experienced a significant rebound on Monday after an initial decline, driven by a correction in crude oil prices amid reports of ceasefire efforts in the ongoing West Asia conflict.
Strong buying in banking and IT stocks, coupled with a strengthening rupee, boosted investor sentiment, according to traders.
In a volatile session, the 30-share BSE Sensex rose by 787.30 points, or 1.07%, to close at 74,106.85. During the day, it surged by 887.91 points, or 1.21%, to 74,207.46.
A total of 3,207 stocks advanced, while 1,147 declined and 190 remained unchanged on the BSE.
The 50-share NSE Nifty climbed by 255.15 points, or 1.12%, to end at 22,968.25.
“The recovery was primarily driven by reports of a potential ceasefire framework in the Middle East, which helped stabilize crude prices after the initial uptick and improved global risk sentiment,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.
Trent saw the biggest gains, up 7.89%, among the 30 Sensex companies. Axis Bank, Titan, Larsen & Toubro, UltraTech Cement, and Bajaj Finance were also among the major gainers.
Reliance Industries and Sun Pharma were the laggards.
Equity indices opened positively but faced profit booking in the first half, creating intraday pressure. However, strong buying emerged in the second half, leading to a sharp upward movement and enabling the benchmarks to close at higher levels, said Hitesh Tailor, Technical Research Analyst at Choice Equity Broking Private Limited.
Sectorally, BSE PSU Bank surged 2.37%, Consumer Durables (2.30%), Private Banks index (2.15%), Financial Services (2.12%), BSE Top 10 Banks (2.07%), and Bankex (2.03%), and utilities (1.94%).
Energy and oil & gas were the laggards.
Consumer durables emerged as the top performer, supported by strong demand and interest in consumption-driven themes. IT stocks also outperformed, with the Nifty IT index gaining due to rupee movements and defensive buying amid geopolitical uncertainty, as currency weakness supports export-oriented earnings.
“Domestic equities staged a strong rally as value buying gained traction across the board. Crude prices softened marginally on reports of ceasefire efforts, while encouraging provisional banking data supported interest in rate-sensitive segments,” said Vinod Nair, Head of Research, Geojit Investments Limited.
However, overall risk appetite remains cautious due to persistent inflationary pressures and concerns over potential disruptions to global trade, he added.
Brent crude, the global oil benchmark, dropped 0.71% to USD 108.3 per barrel.
The rupee gained 14 paise to close at 93.04 (provisional) against the US dollar on Monday.
In Asian markets, South Korea's benchmark Kospi and Japan's Nikkei 225 index ended higher. Markets were closed in Hong Kong and Shanghai for a holiday.
“The rebound was supported by reports of potential US-Iran ceasefire talks, which improved global risk sentiment and eased concerns over prolonged geopolitical tensions…The recovery was further aided by buying in IT and banking stocks, supportive global cues, appreciation in the rupee, and a marginal decline in the India VIX (-0.2%), which helped restore investor confidence after recent declines,” said Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.
US and domestic equity markets were closed on Friday for Good Friday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 9,931.13 crore on Thursday, according to exchange data. Domestic Institutional Investors (DIIs), however, bought stocks worth Rs 7,208.41 crore.
“The rebound was supported by reports of potential US–Iran ceasefire talks, which improved global risk sentiment and eased concerns over prolonged geopolitical tensions…The recovery was further aided by buying in IT and banking stocks, supportive global cues, appreciation in the rupee, and a marginal decline in the India VIX (-0.2%), which helped restore investor confidence after recent declines,” said Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.
On Thursday, the 30-share BSE Sensex settled higher by 185.23 points, or 0.25%, at 73,319.55. The Nifty closed at 22,713.10, up by 33.70 points, or 0.15%.