Mumbai Stock Market Soars: What’s Driving the Surge in Sensex and Nifty?

Market Rally Continues

Mumbai: The benchmark indices, Sensex and Nifty, experienced a notable increase for the third consecutive day on Tuesday, driven by favorable global market trends and a decline in crude oil prices following a peace agreement between the US and Iran.

The BSE Sensex surged by 544.15 points, marking a 0.71% increase, closing at 76,808.48, with significant contributions from the IT, energy, and banking sectors. At its peak during the day, it reached 76,846.74, up by 582.41 points or 0.76%.

Similarly, the NSE Nifty rose by 135.25 points, or 0.57%, finishing at 23,989.15, having peaked at 24,002.60 during the session, an increase of 148.7 points or 0.62%.

Over the past three sessions, the Sensex has gained a total of 2,975.93 points, equivalent to a 4% rise, while the Nifty has climbed 827.55 points, or 3.57%.

Market analysts attribute the positive sentiment to foreign investors becoming net buyers in Indian equities.

Among the 30 companies listed on the Sensex, HCL Tech led the gains with a 3.59% increase, following its announcement of a Rs 1,427 crore investment in Sarvam AI, a government-supported AI model developer, acquiring a 10.46% stake.

Other notable gainers included Bajaj Finserv, NTPC, Hindustan Unilever, Tata Consultancy Services, and Bajaj Finance.

Conversely, InterGlobe Aviation, UltraTech Cement, Maruti, and Tata Steel faced declines.

Brent crude oil, the global benchmark, traded down by 2% at USD 81.45 per barrel.

Vinod Nair, Head of Research at Geojit Investments Limited, commented, "The domestic equity markets are maintaining their recovery momentum, fueled by optimism surrounding the easing of US-Iran tensions and falling crude oil prices. The rally is widespread, with significant gains in IT, real estate, FMCG, and oil & gas sectors."

Broader market indices also saw positive movement, with the BSE MidCap Select index rising by 0.64% and the SmallCap Select index increasing by 0.59%.

Sector-wise, Realty surged by 2.27%, Focused IT by 1.72%, IT by 1.66%, FMCG by 1.12%, Energy by 1%, and Oil & Gas by 0.85%.

However, sectors like Metal, Commodities, and Auto lagged behind.

On the BSE, 2,368 stocks advanced, while 1,886 declined, and 153 remained unchanged. In Asian markets, South Korea's Kospi and Japan's Nikkei 225 ended positively, while Shanghai's SSE Composite and Hong Kong's Hang Seng closed lower.

European markets were also trading higher, and US markets finished positively on Monday, with the Nasdaq Composite rising by 3.07%, the S&P 500 by 1.65%, and the Dow Jones Industrial Average by 0.92%.

Foreign Institutional Investors (FIIs) turned net buyers on Monday, acquiring equities worth Rs 200.05 crore, as per exchange data.

The recent agreement between the US and Iran to reopen the Strait of Hormuz is anticipated to facilitate the resumption of oil and natural gas shipments through this critical energy transit route.

While the specifics of the agreement remain undisclosed, Iran has indicated that implementation will commence only after a formal signing ceremony, which Pakistan, a key mediator, has announced will take place in Switzerland on Friday.

On Monday, the Sensex had already risen by 736.38 points, or 0.97%, closing at 76,264.33, while the Nifty surged by 231 points, or 0.98%, to finish at 23,853.90.