NEW DELHI: The Indian stock markets opened firmly higher on Thursday, mirroring strong gains across Asia-Pacific bourses as hopes of a US-Iran deal eased war-risk premiums and lifted global market sentiment.
The Nifty 50 index opened with modest gains of around 500 points rising 0.6 per cent to 24,385.30 points in early trade on Thursday, while the BSE Sensex jumped 0.7 per cent, or 548.48 pointsm to 78,647.26points. All major sectoral indices traded in the green except the Nifty Pharma index that was marginally down. The Nifty IT and Nifty Media indices led the gainers among sectoral indices rising over 1 per cent each.
The S&P 500, which fully recovered from its Iran war losses on Monday, has risen 3 per cent this week and is now hovering near record highs. The Nasdaq added around 5 per cent for the week, logging its longest winning streak since 2019, while the Dow gained more than 1 per cent. Asian markets opened broadly higher on Thursday, with Japan’s Nikkei up 0.9 per cent and Hong Kong’s Hang Seng up 1.1 per cent, as Wall Street’s momentum spilled over.
Market expert Ajay Bagga said the “war-risk” premium is evaporating fast. “The ‘everything rally’ has found its second wind. As of this morning, global markets are riding a wave of de-escalation optimism. The S&P 500 and Nasdaq have breached historic ceilings, effectively erasing the ‘war discount’ applied since the Middle East conflict intensified on 28th February into a shooting war and massive region wide escalation”, he said.
Bagga noted that the “peace dividend” is now driving sentiment. “The primary engine behind today’s green screens is the progress in US-Iran ceasefire talks. Investors are betting heavily that the two-week ceasefire will hold, with President Trump hinting that the conflict is ‘close to over.’ This optimism has triggered massive short-covering across global equities,” he added.
The Bloomberg Dollar Spot Index is softening as safe-haven demand fades, giving “breathing room to emerging market currencies”. Over the past month, investors have poured more than a net $111bn into US equity funds, while European and Asian funds saw net outflows.
Oil prices remained volatile but off their panic highs. The international benchmark Brent crude rose 0.23 per cent at $95.15 per barrel. Brent had fallen as low as $93 earlier this week, easing fears of an energy shock. “In India, the Nifty 50 is hovering around the 24,000 mark as domestic investors cheer the cooling of Brent crude prices”, Bagga said.
Mahesh M Ojha of Kantilal Chaganlal Securities maintained a positive view on the market. “We have positive view on Market as situation gradually improving from geo-political development, definitely we are able to recover the losses but it can take some more time,” he said.
For Ojha, crude remains the key trigger. “Bigger factor from our prospective is crude. If crude is trading below $80 then we will recover losses earlier than expected but if any spike in crude above $120 then situation can be worse for market.” He sees value in power and related sectors. “Power and power related sector currently looks attractive in first row, (renewable, wind, etc.)”, he added.
Investors will also be watching China’s first-quarter GDP data, which surprised to the upside. Gross domestic product grew 5% in the three months to March, data from the National Statistics Bureau showed Thursday, accelerating from 4.5% in the prior quarter. “China’s Q1 GDP figures surprised to the upside, suggesting that despite regional instability, the ‘factory of the world’ hasn’t skipped a beat”, Bagga noted. However, the growth outlook remains clouded by the Iran war-fueled energy shock threatening global demand. (ANI)
