Benchmark indices advanced for the third day on Thursday as decisive victory by the ruling Bharatiya Janata Party (BJP) in recently concluded state elections and softening crude oil prices boosted market sentiments.
While the Sensex settled 817.06 points or 1.50% higher at 55,464.39, the broader Nifty50 gained 249.55 points or 1.53% to close at 16,594.90 points. Both the indices have added nearly 5% during the last three sessions. The broader markets also gained in line with the headline indices on Thursday. The BSE mid-cap and small-cap rose over 1% each on Thursday.
After hitting an intra-day high of $139.10 on March 7, Brent crude prices declined 13.2% last night amid hopes of positive diplomatic talks between Russia and Ukraine. The softening oil prices also strengthened the rupee to 76.31 against the greenback, the local currency has gained 0.67 paise during the last three sessions. “Markets hate uncertainty and the outcome of these state elections will provide policy continuity and stability. Based on this mandate, the central government will be buoyed to carry out its agenda confidently and look for opportunities to pursue economic reforms.
In the past, clear political mandates have led to euphoria in markets though that is unlikely to be the case this time around. Macro-economic variables are not conducive for markets to experience a surge as higher crude oil prices have stoked inflation fears,” said Devarsh Vakil — Deputy Head Retail Research at HDFC Securities. Central bankers around the globe are unwinding their loose monetary policies and rising interest rates will keep markets on the check at higher levels, added Vakil.
Shares of Hindustan Unilever surged the most on Sensex as worries over the rising commodity prices affecting margins receded. While HUL gained 5.2% on Thursday, Tata Steel surged 4.3%. All the sectoral indices compiled by the BSE ended the day in green with BSE FMCG, Metal and Realty surging over 2%.
Interestingly, foreign portfolio investors seemed to have trimmed their selling spree for some time now. On Thursday, the FPIs sold equities worth $259.6 million –their lowest selling since February 21, 2022. In contrast, the domestic institutional investors bought stocks worth $123.9 million, provisional data on exchanges showed.
