Markets surge in early trade as crude crashes; RBI decision looms
In a stunning early trade move that caught many off guard, stock market benchmarks Sensex and Nifty rocketed higher on Wednesday after crude oil prices plunged sharply and foreign funds poured in, with the crucial RBI monetary policy decision now hanging over the market.
Investors are also awaiting the RBI monetary policy decision to be announced shortly.
The 30-share BSE Sensex climbed 397.59 points to 78,826.54 in early trade. The 50-share NSE Nifty went up by 62.7 points to 24,677.60.
From the Sensex pack, InterGlobe Aviation, Mahindra & Mahindra, Trent, NTPC, Larsen & Toubro and Bajaj Finserv were among the major winners.
Sun Pharma, Tata Consultancy Services, Titan and Bharat Electronics were among the laggards.
Brent crude, the global oil benchmark, traded 1.16 per cent lower at USD 78.44 per barrel.
Foreign Institutional Investors (FIIs) bought equities worth Rs 2,446.47 crore on Tuesday, according to exchange data.
"The sharp dip in Brent crude to below USD 80 and record closing in the US markets augur well for the Indian market today. The focus of the market today will be monetary policy," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
The growth resilience in the economy, improving corporate earnings growth and FIIs turning buyers for the sixth day in a row are positives from the market perspective, he added.
In Asian markets, South Korea's KOSPI jumped 4 per cent, Japan's Nikkei 225 index climbed 3 per cent. Shanghai's SSE Composite index and Hong Kong's Hang Seng index were also trading higher.
U.S. markets ended sharply higher on Tuesday.
"Domestic sentiment has also improved as foreign portfolio investors continue to rebuild positions in Indian equities following a prolonged period of outflows. The recent recovery in the rupee, supported by softer crude oil prices and improving global risk sentiment, has further enhanced the appeal of Indian financial assets," Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, a research analyst firm, said.
Although global uncertainties have not completely receded, investors appear increasingly willing to look beyond near-term geopolitical risks and refocus on corporate earnings, liquidity conditions and domestic growth prospects, he added.
On Tuesday, the Sensex declined 210.08 points, or 0.27 per cent, to settle at 78,428.95. The Nifty dropped 159.40 points, or 0.64 per cent, to end at 24,614.90.