Sensex, Nifty climb: Key factors behind today's market upmove

Indian equity benchmarks rebounded sharply in Tuesday's trading session, recovering from the previous session’s steep decline as easing oil prices, driven by a temporary de-escalation in geopolitical tensions, supported sentiment. At last check, the 30-share BSE Sensex pack surged 932.26 points or 1.28 per cent to 73,628.65, while the NSE Nifty index climbed 307.35 points or 1.37 per cent to 22,820.

The upmove was led by gains in heavyweight stocks such as HDFC Bank Ltd, ICICI Bank Ltd, State Bank of India (SBI), Larsen & Toubro (L&T), Mahindra & Mahindra Ltd (M&M), Kotak Mahindra Bank Ltd, Bharti Airtel Ltd, Titan, Axis Bank Ltd, Eternal Ltd and Reliance Industries Ltd (RIL), which lifted the benchmarks higher.

Buying interest remained broad-based across sectors, with auto, banking, financial services, metals, pharma and consumer stocks witnessing strong traction. The broader market also traded in positive territory, with Nifty Midcap 100 rising 1.53 per cent and Nifty Smallcap 100 advancing 1.38 per cent.

The rebound added over Rs 5.5 lakh crore to investor wealth during opening trade. The BSE's total market capitalisation (m-cap) increased by Rs 5.59 lakh crore to Rs 420.81 lakh crore, compared with Rs 415.21 lakh crore in the previous session.

"US President Trump signalled a 5-day halt to attacks on Iran and talked about 'productive' talks with the Iranian leadership. Immediately Iran's foreign ministry denied this. Later they acknowledged that there are attempts to 'get diplomacy going' through the mediation of some countries. Brent crude crashed by 10 per cent to $100 levels on news of positive initiatives to end the hostilities. The market, it appears, is factoring in an end to the war as reflected in the August US oil futures trading at $80. However, in the near-term there will be excessive volatility in response to news regarding the war and events on the war front," stated VK Vijayakumar, Chief Investment Strategist at Geojit Investments.

"A major drag on the market now is the huge selling by FIIs despite the sharp correction in the market. The continuing weakness in the rupee is the main factor behind this sustained selling by FIIs. Therefore, if some sort of stability is to emerge in the market, rupee should stabilise first. IT and pharmaceutical segments are likely to remain resilient assisted by rupee depreciation," he also said.

On the institutional front, foreign institutional investors (FIIs) remained net sellers to the tune of approximately Rs 10,414 crore, while domestic institutional investors (DIIs) continued their strong buying with inflows of around Rs 12,034 crore, helping provide stability to markets amid ongoing volatility.