At 9.34 am, Sensex rose over 50 pts to 78,564 while Nifty 50 was flat, trading around 24,350. India VIX, which measures volatility in markets, jumped nearly 7% to 18.35 in the early trading hours.
HDFC Bank, Zomato-parent Eternal, Reliance Industries, Tata Steel and Kotak Mahindra Bank shares were the top losers on Sensex, falling up to 1% each. Bucking the trend, Zudio-parent Trent shares gained more than 2% while ICICI Bank, SBI and Adani Ports shares were up nearly 1% each.
Broader markets, which were outperforming benchmarks in the earlier sessions, failed to hold on to the momentum. The Nifty Smallcap 100 index fell nearly 0.7% while the Nifty Midcap 100 index declined around 0.3%.
Nifty Metal and Nifty Realty indices were the top sectoral losers on NSE, declining nearly 1% each in the morning. Bucking the trend, Nifty FMCG, Nifty Media and Nifty PSU Bank indices were trading with marginal gains. Around 1,232 stocks declined on the stock exchange, with 1,421 advanced and 114 remained unchanged.
With the deescalation- escalation drama in the West Asian conflict continuing, the market will remain volatile in the near-term, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “With Iran hardening its position again, closing the Strait of Hormuz and threatening to retaliate to US’ seizure of an Iranian ship ‘violating the US blockade’, there is potential for a flare up of the conflict when the ceasefire ends on 22nd April. However, the market signals do not reflect renewed concern and flare up of the conflict,” he said.
Rupee gainsThe Indian rupee continued to gain against the US dollar, opening 0.1% higher at 92.8250 on Monday, as against the previous closing of 92.9250. The Indian currency has rebounded sharply after crossing the historic 95-mark earlier last month as the raging war in the Middle East and the subsequent skyrocketing rally in oil prices raised worries over the possible impact on India’s macroeconomics.
“Overall, the rupee remains supported in the near term, but sustainability will depend on the outcome of geopolitical developments and crude price stability,” said Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities.
FII remain net buyers for 3rd day
Foreign investors remained net buyers of Indian equities for the third consecutive session, net purchasing shares worth Rs 683 crore during an extremely volatile session on Thursday. FII has overall bought Indian equities worth more than Rs 1,731 crore during the three days.
However, the last purchases are negligible when compared to the massive selloff seen earlier. FIIs have remained net buyers for only four out of 32 consecutive sessions. They net sold Indian equities worth more than Rs 1.6 lakh crore between March 2 and April 9.
After the massive selloff, it is difficult to say whether yesterday’s slight net buying by foreign investors marked a decisive change in their behavior or just the calm before another storm.
Oil prices surge
After sharply declining over the weekend amid expectations of the war cooling down, oil prices shot up following fresh escalations. Brent crude futures surged more than 5% to $95.17 per barrel, while WTI Crude gained around 6% to $88.83 per barrel.
The oil prices are still comfortably below the crucial $100 per barrel mark, which they had crossed for the first time in March since Russia’s invasion of Ukraine back in 2022.
Fresh escalations in the Iran-US war
US on Sunday said that it has seized an Iranian cargo ship that tried to run its blockade and Iran said it would retaliate, raising the possibility that the ceasefire between the two countries might not last for even the two days it is set to remain in force.
Additionally, Iran said that it will not participate in the second round of negotiations, after the previous round failed to culminate in a peace deal earlier this month in Pakistan.
“One cannot restrict Iran’s oil exports while expecting free security for others. The choice is clear: either a free oil market for all, or the risk of significant costs for everyone,” Iran’s First Vice President Mohammadreza Aref wrote on social media.
Meanwhile, Trump said his envoys would arrive in Islamabad on Monday evening, one day before a two-week ceasefire ends. A White House official had said the U.S. delegation would be headed by Vice President JD Vance, who led the war’s first peace talks a week ago, and also include Trump’s envoy Steve Witkoff and son-in-law Jared Kushner. Pakistan, who has been acting as the mediator, seems to be preparing for the talks, although the ground for peace negotiations remains shaky.