The Indian stock market surged sharply on Monday, with the Sensex and Nifty rising 0.5% and 0.4%, respectively, after losing momentum on Friday following a five-session-long bull run.
At 9:23, the Sensex jumped above 400 points to trade at the 77,200 mark, while the Nifty 50 gained around 100 points to trade at the 24,100 level on Monday. This came even as the India VIX, which measures volatility in the market, gained more than 2% to 12.97 in the morning.
HCL Tech, Infosys and Tech Mahindra shares were the top gainers on Sensex, rising nearly 1% each after the sharp fall on Friday wiped off a significant portion of investors’ wealth, as a revenue guidance cut by Wall Street major Accenture spooked investors. Power Grid shares, meanwhile, fell around 0.6% to lead losses on Sensex.
The optimism was broad-based, with Nifty Smallcap 100 and Nifty Midcap 100 indices gaining more than 0.4% each. All sectoral indices were trading in the green, with Nifty IT rising more than 1% to lead gains. Around 1,916 stocks advanced and 583 declined on NSE, while 143 remained unchanged.
Shipping through the Strait of Hormuz slowed, while talks between US and Iranian officials in their first meeting under an interim peace deal were off to a bumpy start. Iran announced it had again closed the waterway, citing Israeli and US violations of the interim peace deal.
US President Donald Trump threatened to resume attacks on Iran, even as US Vice President JD Vance met Iranian officials on Sunday for the first talks under an interim peace deal, while Tehran said the US had failed to meet its commitment to halt fighting in Lebanon.
What lies ahead?
Despite the confusing news coming from the West Asia talks, Brent crude is trading below $80, said VK Vijayakumar, Chief Investment Strategist, Geojit Investments. “This market signal indicates that a further flare-up in the conflict is unlikely. However, the situation remains fluid and has to be watched closely,” he added.
“Meanwhile, rupee appreciation and tapering of FPI outflows continue, and this has the potential to impart resilience to the market. The FPI buy figure of Rs 4,859 crore on Friday is due to the FTSE rejig and, therefore, is not indicative of any trend. The strengthening of the rupee from the low of 96.96 to the dollar reached on May 20 to 94.32 now is a positive, and this trend is likely to continue, given the sharp correction in crude prices and the expected big capital flows, particularly from FCNR(B) deposits. The market momentum is now in the mid and small caps, assisted by superior earnings growth potential. Bank Nifty is fundamentally strong and deserves calibrated accumulation,” the analyst further said.
Oscillators are all seen turning lower, but that is not surprising given downside gapped opening on Friday that followed a five-day spree of higher close, said Anand James, Chief Market Strategist at Geojit Investment. “We remain optimistic about an upmove, given a hammer candle formation on Friday pointing to bulls gaining upper hand. We will start the week with hopes of 24300-600, but also with eyes on 23800 as the downside marker,” he added.
