Stock market benchmark indices BSE Sensex and Nifty 50 rose nearly 1 per cent on Friday, supported by optimism over easing geopolitical tensions, declining crude oil prices, and renewed foreign fund inflows.
Improved global sentiment was driven by fresh hopes of a diplomatic breakthrough between the US and Iran, along with a 10-day ceasefire between Israel and Lebanon, which significantly boosted investor confidence, market analysts said.
The 30-share Sensex climbed 504.86 points, or 0.65 per cent, to close at 78,493.54. During intra-day trade, it surged 564.77 points, or 0.72 per cent, reaching 78,553.45. On the BSE, 3,043 stocks advanced, while 1,284 declined and 166 remained unchanged.
The broader Nifty gained 156.80 points, or 0.65 per cent, to settle at 24,353.55. Investor wealth increased sharply, with total market capitalisation on the BSE rising by Rs 4.84 lakh crore to Rs 4,65,64,461.51 crore (USD 5.02 trillion).
“Overall, the session reflects rising market confidence in a possible near-term resolution to tensions in the Middle East, along with expectations that softer energy prices will support risk assets,” said Ponmudi R, CEO of Enrich Money.
For the week, the Sensex advanced 943.29 points, or 1.21 per cent, while the Nifty gained 302.95 points, or 1.25 per cent. Among the Sensex constituents, Hindustan Unilever, Power Grid Corporation of India, Reliance Industries, Bharat Electronics, Tech Mahindra and Titan Company were among the top gainers.
On the other hand, Sun Pharmaceutical Industries, Mahindra & Mahindra, Larsen & Toubro and HCL Technologies ended lower.
Broader markets also performed strongly, with the BSE SmallCap Select index rising 1.76 per cent and the MidCap Select index gaining 1.31 per cent.
Sectorally, all indices ended in positive territory. FMCG led the rally with a 2.57 per cent gain, followed by Capital Goods (2.19 per cent), Power (1.95 per cent), Utilities (1.51 per cent), Energy (1.43 per cent) and Industrials (1.32 per cent).
Also read: Rupee gains 28 paise against US dollar in early trade
Global oil benchmark Brent crude declined 3.07 per cent to USD 96.34 per barrel, easing concerns over inflation and input costs. “The key driver of today’s rally was the de-escalation in West Asia. Renewed optimism around US-Iran diplomacy and the Israel-Lebanon ceasefire has improved global risk appetite,” said Hariprasad K, Research Analyst and founder of Livelong Wealth.
“This has also reduced fears of a sustained spike in crude prices, which had earlier weighed on inflation expectations, currency stability and overall market sentiment,” he added.
In Asia, markets in South Korea, Japan, China and Hong Kong ended lower, while European markets were trading in positive territory during mid-session deals. US markets had closed higher on Thursday.
Foreign Institutional Investors (FIIs) turned net buyers, purchasing equities worth Rs 382.36 crore on Thursday, according to exchange data.
On Thursday, the Sensex had fallen 122.56 points, or 0.16 per cent, to close at 77,988.68, while the Nifty slipped 34.55 points, or 0.14 per cent, to end at 24,196.75.
Even as investors await the next round of peace talks, the decline in crude oil prices has kept market sentiment positive. Analysts believe that if the talks yield favourable outcomes, markets could see further gains, albeit with a cautious undertone.
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