Sensex jumps 940 points, Nifty gains 1% as oil eases

Sensex rallies 940 points amid easing oil prices and improving global sentiment following US-Iran peace signals; Nifty ends above 24,300.

Indian equity markets staged a strong rebound on Wednesday, May 6, with benchmark indices closing firmly in the green after a volatile start to the week. The Sensex surged 940 points, while the Nifty 50 climbed 298.15 points, or about 1 per cent, to settle at 24,330.95, buoyed by cooling oil prices and positive global cues.

The rally comes a day after both indices had ended lower, reflecting cautious sentiment earlier in the week.

Oil cools, sentiment lifts

A key trigger for the upmove was a decline in global crude prices. Brent crude eased to around $108 per barrel amid indications of progress in diplomatic talks between the United States and Iran. Market participants tracked developments around the Strait of Hormuz closely, as any easing of tensions tends to reduce concerns over supply disruptions.

According to market watchers, softer oil prices typically support import-heavy economies like India by easing inflationary pressures and improving fiscal outlook.

Global cues supportive

Asian markets advanced sharply on Wednesday, setting the tone for domestic equities. South Korea’s KOSPI jumped nearly 6 per cent, while Japan’s Nikkei and Hong Kong’s Hang Seng also posted gains.

Overnight, US markets had closed higher on May 5, with the Nasdaq rising over 1 per cent. The broader positive sentiment filtered into Indian markets during the session, particularly in the second half of the day.

Sectoral movement mixed

Gains were seen across several sectors, though the rally was not entirely broad-based. Aviation, financials, and select mid-cap stocks led the advance.

Among the top gainers on the Nifty 50 were IndiGo, Shriram Finance, TMPV, Advanced Enzymes, and Bajaj Finserv. These stocks posted gains ranging between 1.4 per cent and 2 per cent.

On the losing side, Larsen & Toubro emerged as the biggest laggard, declining nearly 2 per cent. Other stocks such as HUL, ITC, ONGC, and Reliance Industries also ended marginally lower, indicating some profit-booking in heavyweight counters.

FII selling continues

Despite Wednesday’s rally, foreign institutional investors (FIIs) have remained net sellers in recent sessions. Data shows FIIs sold equities worth ₹8,834 crore over the past seven days.

In contrast, domestic institutional investors (DIIs) continued to provide support, with net buying of ₹10,854 crore during the same period. Over the past month, DIIs have been consistent buyers, helping cushion market volatility.

“Flows remain a key factor in the current market structure,” a market participant said, noting that sustained domestic inflows are offsetting foreign outflows to some extent.

Rupee shows recovery

The Indian rupee also showed signs of recovery, rising 19 paise from its previous all-time low to close at 94.99 against the US dollar. The appreciation followed easing crude prices and improved risk appetite in global markets.

Currency stability is often seen as a supportive factor for equities, particularly for sectors reliant on imports.

Rebound after weak close

Wednesday’s gains come after a weak session on Tuesday, when the Sensex had closed 251 points lower at 77,017. The Nifty had also slipped by 86 points to end near the 24,032 mark.

The sharp turnaround suggests that investor sentiment remains sensitive to global developments, especially geopolitical cues and commodity price movements.

What lies ahead

Market participants are likely to keep a close watch on further developments in US-Iran negotiations, as well as crude oil trends. Any sustained decline in oil prices could provide further upside to domestic equities.

Additionally, institutional flows and global market direction will remain key drivers in the near term. Analysts expect volatility to persist, though the underlying trend may stay positive if external conditions remain favourable.

For now, the Sensex rally of 940 points has provided a breather to investors, even as underlying risks continue to linger.