Mumbai: Indian stock markets opened sharply higher on Monday, May 25, supported by strong global cues and falling crude oil prices. The rally pushed the BSE Sensex up by 875 points and the NSE Nifty close to the 24,000 level.
The BSE Sensex rose 875.35 points, or 1.16 percent, to 76,290.70. The NSE Nifty gained 261.50 points, or 1.1 percent, to 23,980.80 during early trade.
Bank Stocks Lead The Rally
Banking shares saw strong buying interest after crude oil prices dropped sharply. Investors believe lower oil prices may help keep inflation under control and support stable interest rates.
Shares of several banking and financial companies rose up to 4 percent during the session.
Hopes Of Strait Of Hormuz Reopening
Global sentiment improved over the weekend after reports suggested that the US and Iran are close to a framework agreement to reopen the Strait of Hormuz.
The Strait of Hormuz is a key global shipping route that handles nearly one-fifth of the world’s oil and LNG supply. Any easing of tensions in the region is seen as positive for global markets.
India-US Trade Deal Optimism
Investor sentiment also improved after US Secretary of State Marco Rubio said that India and the US are close to finalising an interim trade agreement.
Reports also suggest that a US trade delegation may soon visit India to complete discussions.
India VIX Falls
The India VIX, which measures market volatility and investor fear, fell 2.5 percent to 17.38. A lower VIX generally indicates improved confidence and stronger risk appetite among investors.
Global Markets Support Sentiment
Asian markets traded higher on Monday. Japan’s Nikkei index jumped 2.8 percent, while the MSCI Asia-Pacific Index rose nearly 1 percent.
US stock futures also moved higher, with Nasdaq futures rising 0.89 percent and S&P 500 futures gaining 0.6 percent. Wall Street had ended Friday’s session on a strong note.
Crude Oil Prices Fall Sharply
Crude oil prices fell to their lowest levels in two weeks.
Brent crude dropped 5.58 percent to $97.76 per barrel, while WTI crude declined 6.02 percent to $90.78 per barrel. Lower oil prices are considered positive for India as the country imports a large part of its crude oil requirement.
Top Gainers And Losers
Among the top gainers on the Nifty were Eicher Motors, Shriram Finance, M&M, Adani Enterprises, and HDFC Bank.
On the other hand, Hindalco, Sun Pharma, TCS, ONGC, and Tata Consumer Products traded in the red.
