Indian equity benchmarks started the day with a strong rally on Thursday. The primary catalyst appeared to be rising optimism surrounding the de-escalation of geopolitical tensions between Washington and Tehran. This positive sentiment propelled major indices to higher levels amid positive global cues.
Domestic Index Rally: Gains Led by Mid and Small-Caps
The market opened robustly, with the Sensex jumping 0.73 per cent to 78,677. Concurrently, the Nifty began the session higher, rising 0.64 per cent to 24,385.Sectoral performance was strong, with realty, media, consumer durables, and financial stocks leading the gains. Furthermore, category-wise, small-cap and mid-cap stocks emerged as top performers. The Nifty Smallcap 100, Nifty Smallcap 250, and Nifty Midcap 100 all registered gains of up to 1 per cent in the early trading session.
Global Momentum and Institutional Flows Guide Traders
The strong domestic performance aligns with positive momentum observed in global markets. In the US overnight, the major indices saw gains, with the Nasdaq climbing 1.6 per cent and the S&P 500 rising 0.80 per cent.Asian markets also mirrored this positive sentiment. Japan’s Nikkei traded over 2 per cent higher, while South Korea’s KOSPI gained about 2 per cent. The Hang Seng also climbed more than 1 per cent.
Looking at institutional investment, Foreign Institutional Investors (FIIs) were net buyers, accumulating approximately Rs 666 crore on Wednesday. Conversely, Domestic Institutional Investors (DIIs) showed net selling activity, recording an outflow of around Rs 569 crore.
Crude Oil Stability and Analyst Caution Rings
In commodities, oil futures traded on a stable note. Brent crude futures settled at $94.92 per barrel, marking a minor decrease of 0.03 per cent. Meanwhile, US WTI crude futures showed slight strength, trading at $91.52, up 0.25 per cent.Globally, the easing of conflict over the Strait of Hormuz was highlighted by the US President, who stated that the situation would never happen again. Despite the past severity of the disruption, oil prices remain somewhat contained.
Despite the broad market optimism, analysts urge caution. They noted that after the recent sharp rally, the market may undergo a period of consolidation or profit booking at elevated levels. They cautioned that volatility could potentially increase depending on upcoming global developments and triggers.
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