Indian markets today posted their biggest gain in three months, tracking a rally in global equities, after the US and Iran appeared to be stepping back from a military conflict. The Sensex rose 1.55% or 635 points to end at 41,452, lifting investors' wealth by nearly ₹2.2 crore. The broader Nifty settled 1.6% higher at 12,215. The gains were led by banking, auto, metal and energy stocks.
Investors were relieved after US President Donald Trump responded to missile attacks by Iran on US-led forces in Iraq with sanctions as opposed to a military retaliation. Oil also gave up some its recent gains, further lifting the domestic sentiment.
Among the Sensex stocks, ICICI Bank rose 4% to be the top gainer while SBI advanced 3.2% and M&M 3.1%. IndusInd Bank, Maruti Suzuki, Axis Bank, Asian Paints, RIL and HDFC rose between 2% and 3%.
The broader markets also surged today with BSE midcap and smallcap indices each ending 1.5% higher.
"It turned out to be a phenomenal day for the equity markets as the benchmark rose over 1.5% and settled around the day’s high. The surge was largely in reaction to the statement from the US President, who opted not to respond to the Iranian attack on the US troops. Besides, a sharp decline in the crude and strengthening of the rupee further added to the buoyancy," said Ajit Mishra, VP for research at Religare Broking.
Some softness in seen in select IT stocks as the rupee moved higher against the US dollar, with HCL Tech and TCS falling 1% and 1.7% respectively.
"Markets are on a roller coaster ride and there’s no clarity over the trend. Nifty has a strong hurdle at 12,300-12,400 zone and a decisive breakout can only change the prevailing bias else consolidation would continue," he added.
Besides easing tensions in the Middle East, expectations of initiatives to bring back growth in the upcoming budget also cheered investors, said Vinod Nair, head of research at Geojit Financial Services.
"Government is poised to bring initiatives and policy measures to support the economic growth to benefit equities for long term. Meanwhile the short term market trend will be driven by events like Q3 results which are expected to show some improvement due to low base," he added.
Infosys will announce its Q3 earnings tomorrow, kicking off the results season. Infosys shares rose 1.3% today, snapping a three-day losing streak.