Sensex Rises 350 Points As Falling Crude, FII Buying Extend Market Rally

Indian equity benchmarks extended gains for a third consecutive session on Tuesday, supported by easing crude oil prices, a stronger rupee and the return of foreign institutional investor (FII) buying after nearly two weeks of sustained selling.

At 9:30 am, the BSE Sensex was up 351.28 points, or 0.46%, at 76,615.61, while the NSE Nifty50 gained 87.55 points, or 0.37%, to trade at 23,941.45. The benchmarks have now risen nearly 3% over the last two sessions following the announcement of a preliminary peace agreement between the United States and Iran.

Lower Crude, FII Buying Drive Rally

Investor sentiment remained buoyant after Brent crude stayed below the $84-per-barrel mark, easing concerns around inflation, India's import bill and pressure on the rupee. The decline in oil prices is seen as a significant positive for India, one of the world's largest crude importers, as it could improve macroeconomic stability and corporate profitability.

Adding to the positive momentum, foreign portfolio investors turned net buyers on Monday, purchasing equities worth ₹200 crore after 13 consecutive sessions of selling. The return of overseas inflows, coupled with recent RBI measures aimed at attracting foreign capital, has helped improve sentiment towards domestic equities.

Broad-based Buying Across Sectors

Among individual stocks, HCL Technologies, Bajaj Finance, Bajaj Finserv, Larsen & Toubro and SBI Life Insurance were among the top gainers on the Nifty. On the other hand, Hindalco Industries, JSW Steel, Axis Bank, HDFC Life and Tata Motors were among the notable laggards.

Sectorally, buying was broad-based. Except for the metal index, all major sectoral gauges traded in positive territory. Realty, consumer durables, FMCG, IT and capital goods indices gained around 0.5% each.

Broader markets also remained firm, with the Nifty Midcap 100 and Nifty Smallcap 100 indices rising 0.4% and 0.6%, respectively.

The Indian rupee strengthened further, opening at 94.63 against the US dollar compared with Monday's close of 94.71, extending its recovery from recent record lows.

Global cues also remained supportive as Asian markets traded higher after Wall Street ended in positive territory overnight. Improved risk appetite globally has been aided by easing geopolitical concerns and softer commodity prices.

Monsoon Risks Remain On Radar

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the sharp correction in Brent crude and stability in the rupee have improved the market's macro outlook.

"The strong macro headwind of a rising balance of payments deficit is no longer a serious issue plaguing the economy. This positive development has imparted stability to the rupee, which has appreciated to 94.71 against the dollar from the recent low of 96.96. In this backdrop, sustained FII selling is likely to taper going forward," he said.

However, Vijayakumar cautioned that renewed strength in the global AI trade and the strong momentum in markets such as South Korea and Taiwan could continue to divert foreign flows away from India in the near term. He also flagged concerns around the progress of the monsoon, noting that a prolonged rainfall deficit could reignite inflation concerns.

Investors will continue to monitor crude oil prices, foreign fund flows and monsoon developments for further direction, while the Nifty remains within striking distance of the 24,000 mark.