Stock Markets continue to cheer the Iran US peace agreement with Nifty breaching 24,000 mark at opening on Wednesday. Sensex opened above 240 points from the previous close.
However, benchmark indices went for correction at 9:20 as Sensex shed 200 points amid the profit booking.
Sensex was at 76,817.49, up by 9.01 or 0.01% while Nifty was at 24,007.85, up by 4.85 points or 0.02%.
In the early trade, GIFT Nifty was trading at 24,000, up only 6 points from the previous close, indicating a largely flat start for domestic equities.
Crude oil price has been a positive indicator for the stock markets as it was hovering near a three-month low going down by 16 per cent. Brent crude traded below $80 a barrel after tumbling 15% with the US benchmark West Texas Intermediate was trading close to $77 a barrel.
Riding on the rising tensions between US and Iran, the Asian markets traded mixed. MSCI’s broadest index of Asia-Pacific shares outside Japan fell about 0.3 percent. Japan’s Nikkei 225 bucked the trend and rose 0.4 percent.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited said, “There are two factors that are likely to influence the market trend in the near term.One is positive; the other is negative. The positive factor is the steady and sharp decline in crude prices. Brent crude has declined steeply by around 16% in the last 5 days to about $ 79, thereby removing the major macro concern of a rising BoP deficit in India. The negative factor is the deficient monsoon which is causing concerns, particularly about food inflation. But monsoon may pick up in the coming days, as has happened in the past, and reduce anxiety on that front.”
“From the market perspective, another distinct positive trend is the tapering of the FII outflows. This trend is likely to continue since rupee has been steadily strengthening and can appreciate further. The sharp correction in Brent crude to $79 and expectations surrounding massive capital flows to India via the FCNR B deposit route can lead to further appreciation in the rupee, which, in turn, will further dissuade FIIs from selling. They may even turn buyers anticipating further rupee appreciation. This can impart resilience to the market.”