Indian stock markets witnessed a strong rally in early trade on Monday, propelled by a decline in crude oil prices and US President Donald Trump's announcement of assistance for ships stranded in the Strait of Hormuz. The Nifty50 index surged past the 24,100 mark, while the BSE Sensex climbed over 500 points.
Market Performance at Opening
At 9:16 AM, the Nifty50 was trading at 24,166.55, up by 169 points or 0.70%. The BSE Sensex stood at 77,486.95, gaining 573 points or 0.75%. The positive momentum was driven by a combination of global factors, including easing crude oil prices and a supportive stance from the US administration.
Expert Views on Market Trends
Market experts believe that in the near term, the market is likely to remain range-bound with a consolidation bias. This outlook is influenced by persistent foreign institutional selling, a weakening rupee, elevated crude prices, and the lack of a significant breakthrough in US-Iran negotiations, particularly as Washington maintains its blockade stance.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, commented, "Today's market action may be unduly influenced by the state election results, with a focus on West Bengal. However, this will only have a very short-term sentimental impact. The real market trend will be guided by crude oil prices, which, in turn, will be decided by developments in West Asia. President Trump's declaration that the US will help guide ships through the Strait of Hormuz has brought Brent crude down to around $108 levels. Additionally, there is a latest proposal from Iran to the US delivered through Pakistan."
Another major factor influencing market behavior will be FII activity. The continuing momentum in the AI trade implies that FIIs will continue to sell in India. This might keep largecaps under check, with activity moving significantly to the broader market. Therefore, any rally triggered by domestic political developments will be used by FIIs to sell more. The global AI trade will continue to weigh on markets in the near term.
Global Market Cues
Asian shares opened higher on Monday, while crude oil traded in a volatile range as investors assessed conflicting developments from the Middle East. Strong earnings continued to lend support to technology stocks globally. Crude prices edged lower after Trump said Washington would initiate efforts to help ships stranded in the Strait of Hormuz. However, the absence of a formal peace agreement between the US and Iran kept oil prices firmly above the $100-a-barrel mark.
US equities ended Friday on a strong note, with both the S&P 500 and Nasdaq finishing at record closing highs. Robust corporate earnings and a fall in oil prices helped propel the indices, capping their strongest monthly gains in several years.
Disclaimer: Recommendations and views on the stock market, other asset classes, or personal finance management tips given by experts are their own. These opinions do not represent the views of Bharat Horizon.
