A tremendous rise was seen in the Indian stock market on Monday. Despite a slight slowdown after five consecutive sessions of rise on Friday, Sensex and Nifty gained 0.5% and 0.4% respectively on Monday. At 9:23 am, the Sensex was trading more than 447 points higher at 77,249.27, while the Nifty 50 was up nearly 130 points at 24,142. This rise came when ‘India VIX’, an index measuring market volatility, had increased by more than 2 per cent to 12.97 in the morning.
On Friday, Wall Street giant Accenture’s cut in revenue guidance had created panic among investors, reducing a large part of their wealth. After this, on Monday, the biggest rise was seen in the shares of HCL Tech, Infosys and Tech Mahindra and the country’s largest company Reliance Industries in Sensex and all of them rose by about 1 to 3 percent. At the same time, Power Grid shares fell by about 0.6% and were among the biggest falling shares in the Sensex.
Nifty Smallcap 100 and Nifty Midcap 100 indices also gained more than 0.4%. All sector indices were trading in the green, with Nifty IT seeing the best performance with a gain of over 1 per cent. On NSE, about 1,916 shares recorded a rise and 583 shares declined, while there was no change in 143 shares. The special thing is that stock market investors made a profit of more than Rs 2.25 lakh crore in a few minutes.
Tension is increasing in the Middle East
Shipping through the Strait of Hormuz has slowed, while the first meeting of US and Iranian officials under an interim peace deal got off to a rocky start. Iran announced that it had again closed the route, citing violations of the interim peace agreement between Israel and the US. US President Donald Trump threatened to resume attacks on Iran, while US Vice President JD Vance met Iranian officials on Sunday for the first talks under an interim peace deal. At the same time, Tehran said that America has failed to fulfill its promise to stop fighting in Lebanon.
What will happen next?
VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said that despite the confusing news coming from the West Asia talks, Brent crude is trading below $ 80. He said that this market signal shows that there is little possibility of the conflict escalating further. However, the situation is still uncertain and needs to be monitored closely. Meanwhile, the strengthening rupee and reduction in FPI outflows continues, and this has the potential to provide a boost to the market.
FPI buying of Rs 4,859 crore on Friday was due to rejig in FTSE and hence, is not indicative of any trend. It is a positive thing that the rupee has strengthened from the low of 96.96 against the dollar on May 20 to now reach 94.32. Given the sharp fall in crude prices and the expectation of massive capital inflows, especially from FCNR(B) deposits, this trend is likely to continue.
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