Why market is rising today: Sensex, Nifty gain even as oil prices stay above $86 a barrel

Even as crude oil prices continued to rise for the third straight session, equity benchmark indices Nifty and Sensex advanced in Wednesday's trade, in line with Asian peers, as a soft inflation print in the US overnight eased fears of a looming Fed rate hike. Stocks also gained as a revised version of a major Russia sanctions bill unveiled in the US Senate has softened the tariff threat facing India and China, the two largest buyers of Russian crude oil.

Add to that, Chinese Q2 GDP print at 4.3 per cent was lowest in the past three years, which raised hopes of stimulus by the second largest economy. It also suggested China's crude demand may stay low in the near future, capping upside in oil prices.     

The BSE Sensex rose 516.56 points or 0.67 per cent to 77,571.50. Nifty stood at 24,196.60, up 144.55 points or 0.60 per cent. Shriram Finance, HDFC Life, InterGlobe Aviation, Bajaj Finance, SBI Life and State Bank of India gained 2-3 per cent.  

The unexpectedly soft US CPI reading triggered a sharp shift in rate expectations, with the probability of a July Fed hike falling from 42 per cent to 17 per cent, said Devarsh Vakil, Head of Prime Research at HDFC Securities.

At the second quarterly symposium of this year, Chinese Premier Li noticeably called for “stepping up countercyclical policy adjustment” again to stabilize growth, without mentioning “cross-cyclical”. The “countercyclical” was highlighted at the October 2025 symposium but dropped at the one in April 2026. Nomura said this renewed emphasis as a potential harbinger for policy efforts to turn more supportive in H2, especially in view of deteriorating aggregate domestic demand in Q2.

In another note, Nomura noted that China’s oil imports have corrected from 5-year average of 11mbpd to 7.8mbpd by June, close to decade lows. "We think China having such large oil reserves may continue to be a calming influence on global oil prices and oil price volatility may continue to be restrained compared to what oil market has witnessed in the past oil shock events," it said.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments said the best strategy during totally uncertain and complex times like these is to remain invested and continuing to invest in stocks in growth sectors which are fairly valued. "Q1 results of leading banks, NBFCs and auto stocks will be good. Digital platform companies are likely to report good growth numbers," he said.