Nifty Surges Over 150 Points, Signaling Strengthening Market Sentiment Amid Decline in Oil Prices and Global Market Rebound
Indian Markets Expected to Open Sharply Higher
The Indian stock market is set to open with a strong rally on Wednesday, following a significant gain in the GIFT Nifty index. The GIFT Nifty index rose 173 points or 0.72 percent to 24,283 in early trade, indicating a firm rebound for benchmark indices Sensex and Nifty after a weak close on Tuesday.
The positive opening cues are largely driven by an improvement in global risk sentiment, led by easing crude oil prices and optimism around a potential US-Iran agreement. Brent crude prices fell for a second consecutive session, dropping $1.52 or 1.38 percent to $108.35 per barrel, following a sharp 4 percent decline in the previous session. US WTI crude prices also slipped $1.50 or 1.47 percent to $100.77.
The decline in crude oil prices follows comments from US President Donald Trump signalling "great progress" towards a final agreement with Iran, raising hopes of easing supply disruptions in the Strait of Hormuz. This development has led to a rally in global markets, with Asian equities surging.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
| Market | Previous Close | Current Close | Change |
|---|---|---|---|
| MSCI Asia-Pacific Index (ex-Japan) | - | 2.3% gain | - |
| South Korea's Kospi | - | Over 5% gain | - |
| S&P 500 | 7,245.41 | 7,259.22 | 0.81% gain |
| Nasdaq Composite | 25,224.10 | 25,326.13 | 1.03% gain |
| Dow Jones Industrial Average | 49,281.75 | 49,298.25 | 0.73% gain |
On Wall Street, the S&P 500 rose 0.81 percent to close at a record high of 7,259.22, while the Nasdaq Composite gained 1.03 percent to 25,326.13. The Dow Jones Industrial Average also advanced 0.73 percent to 49,298.25. However, despite the positive global cues, underlying caution persists in the Indian market.
Institutional flows remain mixed, with foreign institutional investors turning net sellers again on Tuesday, offloading Rs 3,621 crore worth of equities. Domestic institutional investors, on the other hand, continued to provide support with inflows of Rs 2,600 crore. Analysts say markets may open strong but remain range-bound, as elevated crude oil prices continue to pose inflation risks.
The Nifty is expected to face resistance around the 24,300-24,400 zone, with immediate support near the 23,800 level, according to Ponmudi R, CEO of Enrich Money. While easing oil prices and global rally provide a strong near-term boost, geopolitical developments remain fluid, and market direction is likely to remain highly sensitive to developments around US-Iran negotiations, crude oil prices, and institutional flows.
Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
Investor Takeaway
Investors should be cautious of the market's rebound and consider diversifying their portfolios.
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