Indian stock market traded higher on Wednesday, with Sensex in the green and Nifty also trading in positive territory.
Sensex gained more than 500 points to trade at 74,450 pts, while Nifty 50 rose 150 points to trade above 23,350. This came as India VIX inched up around 0.85% to 15.71.
Reliance Industries, Hindustan Unilever, Trent, Infosys, ICICI Bank, Kotak Mahindra Bank, TCS and HDFC Bank shares gained around 1% each to lead gains on Sensex, while Tata Steel and Eternal fell nearly 1% to lead losses.
Broader markets also remained muted, with Nifty Midcap 100 and Nifty Smallcap 100 indices trading with marginal gains. Sectorally, Nifty Metal and Nifty Auto slipped into the red, while other sectoral indices traded in the green. Around 1,520 stocks advanced on NSE, while 870 declined and 105 remained unchanged.
Some caution is, however, warranted as tensions between Iran and the US re-escalated overnight, further erasing expectations of the two countries concluding their much-awaited peace deal and ending the ongoing conflict in the Middle East.
The US military launched airstrikes and Iran retaliated after the crash of an Army helicopter near the Strait of Hormuz, which US President Donald Trump blamed on the Islamic Republic. Iran launched attacks in Bahrain and Kuwait, which both sounded alerts and fired air defences in response. Iran said it has targeted an air base in Jordan hosting US forces.
As a result of rising uncertainties in the Middle East, oil prices rose. Brent crude futures rose more than 1% to trade above $92 per barrel, while WTI crude futures gained nearly 1% to trade at $89 per barrel. "The market is likely to largely ignore the escalation of the conflict in West Asia as a one-off. The softness in crude prices indicates that. Despite the escalation, Brent crude continues to trade below the $93 level," said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
Rupee opened lower, falling 0.2% to 95.54 against the US dollar, compared with the previous closing level of 95.35. "Market participants are now closely watching the Finance Ministry for any measures aimed at attracting foreign capital, including possible tax reforms or incentives for FDI and FII flows, which could help reduce pressure on the currency. Technically, rupee support is seen near 95.50–95.75, while resistance is placed around 95.25–95.00," according to Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.
What lies ahead?
Indian markets are expected to stabilise in the near term amid talks of a truce between Israel and Iran and easing crude oil prices, which have improved overall market sentiment, said Siddhartha Khemka, Head of Research, Wealth Management, at Motilal Oswal Financial Services. However, the absence of a definitive resolution to geopolitical tensions, coupled with concerns over inflation, commodity price volatility and monsoon trends, may keep investors cautious and limit upside, he added.
"Going forward, developments in West Asia, crude oil prices, monsoon progress, IPO activity, foreign fund flows and global macroeconomic cues will be key monitorables," according to the analyst.
Technical view on Nifty
If Nifty manages to hold above the support area of 23,000–23,100, this will keep the pullback trend intact and open gradual upside towards 23,500–23,550 levels in the coming sessions, being the confluence of the 20-day EMA and the last Tuesday's high, said Bajaj Broking.
"Nifty has key support at 23,000–23,100, being the confluence of the 61.8% retracement of the previous pullback (22,182–24,601) and the lower band of the falling channel," it added.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
