Stock market today: The stock market bulls kicked off the week in high spirits as a cool-down in crude oil prices and bond yields spurred risk-on sentiment on Dalal Street.
Investors lapped up stocks after both benchmarks witnessed a prolonged consolidation for six weeks, during which they shed almost 5 per cent.
Oil cools downCrude oil prices slipped for the fourth day today, easing concerns around inflation and the current account deficit.
Easing oil prices also dragged yields lower.
In Asian markets, South Korea's KOSPI gained 1.62 per cent and Hong Kong's Hang Seng added 1.04 per cent.
Stock market today: The stock market bulls kicked off the week in high spirits as a cool-down in crude oil prices and bond yields spurred risk-on sentiment on Dalal Street.
In Monday's trade, BSE barometer Sensex rallied as much as 692 points or 0.93 per cent to 74,987 and settled the session 564 points or 0.76 per cent lower at 74,858.99. Meanwhile, its NSE counterpart, Nifty 50, gained 120 points or 0.51 per cent to 23,467 during the day and closed at 23,414, down 68 points or 0.29 per cent.
Investors lapped up stocks after both benchmarks witnessed a prolonged consolidation for six weeks, during which they shed almost 5 per cent.
Analysts at SBI Securities said that the gradual decline in crude oil prices over the last four trading sessions has provided some respite to Asian equities and improved risk sentiment, despite geopolitical tensions in West Asia showing little signs of easing.
What's driving the stock market?
Here are key factors behind the stock market rise today:
1. Oil cools down
Crude oil prices slipped for the fourth day today, easing concerns around inflation and the current account deficit. Brent crude has slipped to $101 today from $XX last week. The main trigger is an easing of Saudi supply fears, as the kingdom has begun routing extra cargoes to Asian buyers through ship-to-ship transfers near the Strait of Hormuz, and higher loadings have calmed worries about a complete export halt after the pipeline attack.
Rajeev Sharan, Head of Research, Brickwork Ratings, said that for India, a major importer, this is welcome relief. A softer crude bill eases pressure on the import bill, the rupee and imported inflation, and offers some breathing room on the current account, he noted.
ALSO READ: Oil prices hit over 1-week low on hopes of boost to diplomacy in Iran war "That said, this is relief rather than a reversal, as Brent is still above $100 and the geopolitical risk premium remains, so any fresh escalation could quickly undo the fall. The near-term inflation and growth picture improves modestly, but the external risk stays firmly on the radar," he cautioned.
2. Bond yields decline
The yield on the US 10-year Treasury note fell by about 3 basis points to 4.97 per cent at the start of a busy week as several Federal Reserve officials are slated to offer cues on the monetary policy outlook. Easing oil prices also dragged yields lower.
Low US bond yields are good for emerging markets like India as it ensures rupee stability and ease the risk of capital outflows. Last week, the benchmark yield surged to a 19-year high as the Fed raised interest rates.
3. Global markets led support
Stocks gained globally, with the positive sentiment rubbing off on Indian markets. In Asian markets, South Korea's KOSPI gained 1.62 per cent and Hong Kong's Hang Seng added 1.04 per cent. Chinese markets also gained as Shanghai Composite rose 0.96 per cent.
US stocks also pointed towards a positive state as S&P 500 futures advanced 0.6 per cent and Nasdaq 100 contracts rose 0.8 per cent amid gains in tech stocks.
4. Tech view
Shrikant Chouhan, head - equity research, Kotak Securities, said that technically, the Nifty has formed a bearish candle on the weekly chart and continues to maintain a lower-top formation on the daily chart, indicating a weak short-term trend. However, the market is now in an oversold zone, increasing the possibility of a sharp pullback rally from current levels.
Top Gainers Today | Top Losers Today | Stocks to watch For traders, 23,200/74,000 and 23,150/73,700 can remain the key support zones, according to him. "As long as the Nifty sustains above these levels, a pullback towards 23,500/74,700 cannot be ruled out. A decisive move above 23,500 would further extend the recovery towards 23,600–23,700/75,000–75,300."
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