Sensex, Nifty Rally as Easing Oil Prices Lift Hopes of Strait of Hormuz Opening

Indian stock markets opened higher on Wednesday as easing crude prices and hopes of progress on the reopening of the Strait of Hormuz improved investor sentiment.

At around 9:55 am, the BSE Sensex was trading 292.31 points, or 0.38%, higher at 77,948.40. The Nifty 50 gained 32.65 points, or 0.13%, to reach 24,367.20. The Sensex opened at 77,892.10, while the Nifty started at 24,341.95.

The positive opening followed a decline in global oil prices after Iran resumed talks with Oman over the strategic waterway. Any progress towards reopening the Strait of Hormuz could help restore the movement of oil supplies and ease concerns over energy costs.

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said the latest ceasefire developments between the US and Iran and efforts to restart shipping through the Strait were positive developments for markets.

Brent crude had fallen to around $86.30 a barrel, he noted, adding that lower oil prices were particularly beneficial for India, where expensive crude has been a major market concern.

Falling US bond yields also provided some support to equities. The 10-year US Treasury yield stood at 4.64%.

Broader market opens higher

The broader market also remained firm in early trade. The Nifty 100 rose 0.21%, while the Nifty 200 and Nifty 500 gained 0.23% and 0.27%, respectively.

The Nifty Midcap 50 advanced 0.31%, the Nifty Midcap 100 rose 0.30% and the Nifty Smallcap 100 gained 0.36%. India VIX declined 2.88% to 10.76.

PSU banks led the sectoral gains, with the Nifty PSU Bank index rising 1.42%. Nifty Private Bank gained 0.81%, while Nifty Financial Services 25/50 and Nifty MidSmall Financial Services advanced 0.77% and 0.66%, respectively.

Nifty MidSmall IT & Telecom rose 0.58%, Nifty Media gained 0.54%, Nifty MidSmall Healthcare advanced 0.42%, Nifty Financial Services ex-Bank climbed 0.63% and Nifty Pharma added 0.22%.

Nifty Auto fell 0.08%, Nifty IT slipped 0.17% and Nifty Consumer Durables declined 0.22%.

Eternal leads Nifty gainers

Eternal was the top Nifty 50 gainer, rising 1.78%. Kotak Mahindra Bank gained 1.41%, ICICI Bank rose 1.28% and Ultratech Cement advanced 1.26%.

Bajaj Finserv gained 1.21%, NTPC rose 1.19%, SBI advanced 1.09%, Adani Ports gained 1.07%, ITC climbed 1% and Hindustan Unilever added 0.98%.

Infosys was the biggest drag on the index, falling 1.12%. Bharti Airtel declined 0.79%, Larsen & Toubro fell 0.66%, BEL slipped 0.40% and Tech Mahindra lost 0.13%. Tata Steel was down 0.08%.

Oil prices extended their decline, with WTI crude falling 2.38% to $80.40 a barrel and Brent crude dropping 2.47% to $86.39.

Analysts remain cautious

Despite the favourable developments, Vijayakumar said investors should not expect an immediate sharp rally in the Nifty.

He pointed to technical weakness in several large-cap stocks as a factor that could limit gains in the benchmark index.

The broader market could continue to drive the upside, supported by fundamentals and positive momentum. However, Vijayakumar warned that valuations in the broader market are becoming stretched.

For Indian equities, the next major cues are likely to come from developments around the Strait of Hormuz, crude oil prices and global bond yields.