Indian benchmark indices Sensex and Nifty sharply jumped up to 1% on Tuesday, extending gains for the third consecutive session as cooling oil prices, Iran-US peace talk hopes and other factors continue to support bulls in the market.

Sensex jumped 666 points, or 0.85%, to 79,186.35, while Nifty 50 gained more than 167 points to 24,532, as of 12.48 pm. The sharp gains today added more than Rs 3 lakh crore to the total market capitalisation of all companies listed on BSE, taking it to nearly Rs 469 lakh crore.

The benchmark indices are extending gains for the third consecutive session, with Sensex gaining around 1,200 points (1.5%) and Nifty rising around 1.4% during the period so far. The sharp gains over these three sessions have added more than Rs 8 lakh crore to the total market capitalisation of all companies listed on BSE.

Trent shares were the top gainers on Sensex, jumping more than 4% as investors await the company’s bonus issue announcement scheduled for tomorrow. Bajaj Finance shares followed, rising nearly 3%. ICICI Bank, HDFC Bank and Adani Ports shares, meanwhile, gained around 2% each. Bucking the trend, Bharat Electronics (BEL), Titan and Reliance Industries shares declined up to 1%. This came as India VIX, which measures market volatility, declined nearly 6% to 17.75.

The optimism spilled over to the broader markets as well, with Nifty Smallcap 100 and Nifty Midcap 100 indices gaining 0.7% each. Sectorally, the Nifty Realty index jumped around 3% to emerge as the top sectoral gainer.

In the near term, the market will continue to be news-driven, oscillating between hope and fear, according to VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “Reports of a second round of talks between the US and Iran are keeping hopes of a resolution to the conflict alive. Brent crude at $95 and declining spot prices of crude reflect market confidence that the conflict may not last long. But if it does, crude prices will again spike, impacting stock markets,” he said.
“A prolonged war means slower growth and higher inflation for long. Such a scenario will push the market down. In brief, uncertainty looms large. During such periods of uncertainty, the only thing investors can do is remain calm and exercise utmost discipline in investing. Fairly valued, fundamentally sound stocks will be available at reasonable prices during this period of uncertainty and fear. Such stocks can be accumulated in a calibrated manner for the long term,” he added.

Here are 4 key factors boosting markets today.

1) Iran-US peace talk hopes Trump’s ceasefire deadline for the Iran war is set to expire tomorrow, April 22, keeping investors on edge. However, markets are increasingly expecting an early end to the war. Officials from the two countries are likely to meet this week for the second round of negotiations, after the previous round failed to culminate in a long-lasting peace deal earlier this month.

Yet, some caution is warranted. Iranian Foreign Minister Abbas Araqchi said “continued violations of the ceasefire” by the US are a hindrance to further negotiations. Iran’s top negotiator and Speaker of Parliament, Mohammad Baqer Qalibaf, reiterated that Tehran would not negotiate under threats.

US President Donald Trump, meanwhile, took to Truth Social to criticise previous US leaders for brokering what he claimed to be a terrible deal with Iran. “If a deal happens under ‘TRUMP’, it will guarantee peace, security and safety, not only for Israel and the Middle East, but for Europe, America and everywhere else. It will be something that the entire world will be proud of, instead of the years of embarrassment and humiliation that we have been forced to suffer due to incompetent and cowardly leadership!” he added.

2) Oil prices hold near $95 per barrel

Oil prices cooled slightly, with Brent crude futures hovering near $95 per barrel and WTI crude futures declining to $88 per barrel. Oil prices continue to sustain comfortably below the crucial $100 per barrel mark, which they had crossed for the first time since Russia’s invasion of Ukraine in 2022.

The decline in oil prices comes amid rising expectations of an Iran-US peace deal and the subsequent possibility of complete resumption of trade through the Strait of Hormuz, a critical chokepoint for global oil and trade. Meanwhile, Kuwait declared force majeure on oil shipments due to the strait’s blockade, Bloomberg News reported.

3) Global markets in the green

The optimism on Dalal Street comes amid an overall relief rally in global markets. Japan’s Nikkei gained around 1%, while South Korea’s Kospi rallied nearly 3%. Hong Kong’s Hang Seng gained more than 0.6%, while China’s Shanghai Composite erased all morning losses to move into the green.

European markets opened in the green, with the UK’s FTSE and France’s CAC trading with marginal gains and Germany’s DAX rising over 0.6%. Wall Street ended the previous session in the red, with the tech-heavy Nasdaq declining 0.26% after hitting new record highs. Dow Jones futures are, however, in the green today.

4) FII selling softens

After net purchasing Indian equities for three consecutive sessions, foreign investors turned net sellers on Dalal Street again on Monday. FIIs net sold Indian equities worth nearly Rs 1,060 crore on Monday, after net buying shares worth Rs 1,731 crore over three consecutive sessions last week.

However, the quantum of FII selling has reduced significantly following the massive selloff in March, which spilled over into April as well. For example, FIIs net sold Indian equities worth Rs 8,692 crore on April 7, more than Rs 11,163 crore on March 30 and over Rs 10,414 crore on March 23. Yesterday’s net selling is significantly lower than previous FII selling sprees seen recently.

Yet, some caution is warranted. Bond yields remain elevated, and the rupee has weakened against the US dollar. The Indian rupee declined 0.3% against the US dollar to 93.45, weighed down by a partial rollback in the RBI’s FX measures and uncertainty over the US-Iran talks.

(With inputs from Reuters)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)