Mumbai : Stock markets opened sharply higher on Monday, extending Friday’s rally as signs of a peace agreement between the United States and Iran boosted global investor sentiment. The S&P BSE Sensex surged 1,097.05 points, or 1.45%, to 76,625.00 in early trade, while the NSE Nifty50 jumped 333.90 points, or 1.41%, to 23,955.95 as of 9:25 am.
Brent crude plunged 4.59% to $83.32 per barrel, while WTI crude fell 5.02% to $80.62 a barrel. The sharp decline in oil prices is a major positive for India, the world’s third-largest oil importer, as it reduces pressure on inflation, the current account deficit and the rupee. The gains were broad-based, with almost all major sectors trading in positive territory. Nifty Realty emerged as the biggest sectoral gainer, rising 2.75%, followed by Nifty Financial Services, which climbed 1.79%, and Nifty Auto, which advanced 1.94%.
Only a few stocks traded lower, with Bharti Airtel slipping 0.31%, Sun Pharma declining 0.12%, while the broader market also witnessed strong buying. The Nifty Midcap 100 and Nifty Smallcap 100 indices rose 1.35% and 1.36%, respectively. Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the sharp correction in Brent crude below the $84 level has significantly improved the outlook for the Indian economy and stock market.
Vijayakumar added that domestic institutional investors and retail investors are likely to drive the market higher, while banks may lead the rally due to attractive valuations and short-covering in private banking stocks. However, he cautioned that valuations in the broader market remain expensive, with Nifty Midcap and Smallcap indices trading at higher earnings multiples compared with the benchmark Nifty.
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