Sensex, Nifty Rise as Falling Oil Prices Boost Sentiment on Hormuz Reopening Hopes

Indian equity markets opened higher on Wednesday, supported by gains in global stocks and a sharp decline in crude oil prices as hopes grew over the possible reopening of the Strait of Hormuz.

At around 9:55 am, the BSE Sensex was up 292.31 points, or 0.38%, at 77,948.40, while the Nifty 50 gained 32.65 points, or 0.13%, to 24,367.20. The Sensex opened at 77,892.10 and the Nifty at 24,341.95.

The easing in oil prices came after Iran resumed discussions with Oman over arrangements for managing the strategic waterway, raising expectations of a reopening that could help restore the flow of global crude supplies.

Geojit Investments Chief Investment Strategist Dr V K Vijayakumar identified the latest US-Iran ceasefire developments and efforts to restart shipping through the Strait of Hormuz as positive factors for Indian markets.

He noted that Brent crude had fallen to around $86.30 a barrel. The decline is significant for India because elevated oil prices have been a major pressure point for the domestic equity market.

Vijayakumar also highlighted falling US bond yields as a supportive factor for global equities, with the 10-year US Treasury yield at 4.64%.

PSU banks lead broader market gains

The broader market also started in positive territory. The Nifty 100 rose 0.21%, while the Nifty 200 and Nifty 500 gained 0.23% and 0.27%, respectively.

The Nifty Midcap 50 advanced 0.31%, the Nifty Midcap 100 gained 0.30% and the Nifty Smallcap 100 rose 0.36%. India VIX declined 2.88% to 10.76, indicating a moderation in market volatility.

Among sectoral indices, Nifty PSU Bank was the strongest performer, rising 1.42%. Nifty Private Bank gained 0.81%, Nifty Financial Services 25/50 advanced 0.77% and Nifty MidSmall Financial Services rose 0.66%.

Nifty MidSmall IT & Telecom gained 0.58%, Nifty Media rose 0.54%, Nifty MidSmall Healthcare advanced 0.42%, Nifty Financial Services ex-Bank climbed 0.63% and Nifty Pharma added 0.22%.

Nifty Auto slipped 0.08%, Nifty IT declined 0.17% and Nifty Consumer Durables fell 0.22%.

Eternal, Kotak Bank among top gainers

Eternal led the Nifty 50 gainers, rising 1.78%. Kotak Mahindra Bank gained 1.41%, while ICICI Bank advanced 1.28%. Ultratech Cement rose 1.26%, Bajaj Finserv gained 1.21% and NTPC added 1.19%.

SBI advanced 1.09%, Adani Ports rose 1.07%, ITC gained 1% and Hindustan Unilever climbed 0.98%.

Infosys was the biggest Nifty 50 laggard, falling 1.12%. Bharti Airtel declined 0.79%, Larsen & Toubro slipped 0.66%, BEL fell 0.40% and Tech Mahindra lost 0.13%. Tata Steel was down 0.08%.

Crude prices continued to decline, with WTI crude down 2.38% at $80.40 a barrel and Brent crude falling 2.47% to $86.39.

Sharp Nifty rally may remain limited

Despite the improvement in global cues and lower oil prices, Vijayakumar cautioned that the conditions may not be strong enough to trigger a sharp rally in the Nifty.

He pointed to technical weakness among several large-cap stocks as a potential limitation on the benchmark index.

According to him, the broader market could remain the main source of gains, supported by improving fundamentals and momentum. However, stretched valuations across the broader market remain a key concern for investors.

The market’s near-term direction is therefore likely to remain closely tied to developments around the Strait of Hormuz, crude prices and global bond yields.