Indian benchmark indices, Sensex and Nifty, extended their winning streak to a fourth consecutive session on Monday, driven by a sharp decline in global crude oil prices, strong gains in IT stocks and sustained foreign fund buying.
Key Highlights
- Sensex gained 544 points to 78,639 and Nifty rose 391 points to 24,774, extending gains to 4th day.
- Nifty IT jumped 3.28% leading gains, while Brent crude fell over 4.6% and FIIs bought Rs 277 crore.
The NSE Nifty 50 surged 390.70 points, or 1.60%, to close at 24,774.30, reclaiming the 24,700 mark, while the BSE Sensex advanced 544.39 points, or 0.70%, to settle at 78,639.03. The 30-share index was up as high as 800 points during the session before some of the gains were capped off.
Crude Slump and FII Buying Fuel the Rally
Sentiment among investors was improving as oil futures fell by more than 4.6% to about $83.9 a barrel, reflecting a de-escalation of geopolitical tensions and hopes for a return of dialogue between the US and Iran. India is one of the biggest importers of crude oil, and lower prices are viewed as a positive for it, since they help deflate inflationary pressures and boost corporate profits.
Foreign institutional investors (FIIs) also were behind the rally as they bought Indian stocks worth Rs 277.48 crore on Friday. Foreign investors were net buyers in July for the first time in four months, investing a whopping Rs 20,200 crore in the Indian stock market in the last month.
"This sell-off of crude oil prices came as a boon for markets as it had lifted concerns on inflation and corporate earnings", said Vinod Nair, Head of Research at Geojit Investments, adding that this was triggered by renewed U.S.-Iran dialogue. The sentiment was also bolstered by FII inflows picking up and strengthening rupee, but added that high bond yields in the United States were a major worry for the sustainability of foreign capital inflows into emerging markets.
IT Leads Sectoral Rally; Media Bucks the Trend
The trend of buying was across sectors with Nifty IT topping the list with a rally of 3.28% as technology stocks rallied on the day as they are the major weight in the index. Nifty Private Bank rose 1.90% and Nifty Bank trades up 1.72%. Nifty FMCG also rose 1.72%, followed by Nifty Auto (1.46%), Nifty Metal (1.43%) and Nifty Realty (1.31%). Only the major sectoral loser, Nifty Media, saw a loss, down 3.09%.
Also Read: Sensex and Nifty End Higher in Volatile Market Session
Grasim Tops Gainers; Pharma Stocks Drag
Grasim Industries was the top gainer with an increase of almost 4.9% among Nifty constituents, followed by Tata Consultancy Services, InterGlobe Aviation, Infosys and Shriram Finance. Sun Pharmaceutical Industries, ONGC and Tech Mahindra, Maruti Suzuki and Apollo Hospitals, on the other hand, were the top losers of the day.
Global Markets Trade Mixed
Stock market were mixed in Asia with South Korea's Kospi falling more than 5% while Japan's Nikkei 225 and China's Shanghai Composite were down. Hong Kong's Hang Seng ended in positive territory.
European markets were trading higher in afternoon deals, taking cues from Wall Street, where US equities had closed higher on Friday.
