Mumbai: Equity benchmark indices Sensex and Nifty bounced back sharply in early trade on Tuesday after two days of massive decline, following a drop in crude oil prices and recovery in global markets amid hopes that the conflict in West Asia could conclude soon.
The 30-share BSE Sensex rebounded 809.57 points to 78,375.73 in opening trade. The 50-share NSE Nifty climbed 252.75 points to 24,280.80.
Brent crude, the global oil benchmark, tumbled 5.18 per cent to USD 93.83 per barrel.
This was after US President Donald Trump indicated that the ongoing conflict between the United States and Iran may be approaching a resolution. Meanwhile, a fall in the dollar as well as crude oil prices also aided the sentiment.
Sensex opened 809.57 points or 1% higher at 78,375.73 while broader Nifty rose 252.75 points or 1% to 24,280.80. Broader markets outperformed benchamark indices. However, both indices later pared gains to trade around 0.4% higher.
Among sectors, Nifty Auto led the gains followed by banks, financial services, realty, pharma indices.
The anticipated rebound comes after a sharp sell-off in the previous session. On Monday, domestic equities ended significantly lower as escalating tensions in the US-Iran conflict and a sharp spike in crude oil prices weighed heavily on investor sentiment.
Crude oil and Asian shares today
Oil prices plunged while global equities rallied on Tuesday after US President Donald Trump suggested that the US-Israel conflict with Iran could end sooner than initially expected, easing investor concerns after a day of extreme volatility in energy markets.
The comments came as the crisis in the oil-rich Middle East entered its second week. Trump told CBS News that the military campaign was “very complete” and warned that any attempt by Iran to disrupt oil shipments through the Strait of Hormuz would draw a rsponse of ‘incalculable’ scale. The strategic waterway handles roughly 20% of global oil supply, making it critical to energy markets.
Oil markets had witnessed dramatic swings a day earlier, with crude surging nearly 30% to above $119 per barrel before tumbling to around $84. As trading resumed, Brent crude futures dropped up to 10% to below $90 per barrel, helping calm global markets.
Equities across Asia rebounded strongly. MSCI’s Asia-Pacific index excluding Japan rose 2.6%, recovering some losses recorded since the conflict began. Japan’s Nikkei 225 jumped 3.6%, while South Korea’s Kospi surged 6.4%.
Other Asian markets also posted gains, including Hong Kong, Shanghai, Sydney, Singapore, Wellington, Taipei, Manila and Jakarta.
The rebound followed a strong recovery on Wall Street, where all three major US indices ended sharply higher after reversing steep early losses, signalling improved investor sentiment after the previous day’s turmoil.
