Indian shares settled higher on Tuesday, climbing from their lowest levels in nearly a year, as crude oil prices eased in a relief rally enabled by comments from U.S. President Donald Trump read by market participants as de-escalatory.
The Nifty 50 ended0.97% higher at 24,261.60 and the BSE Sensex rose0.82% to 78,205.98.
The benchmark indexes had posted their sharpest fall in a month on Monday, with the volatility index surging to a 21-month high after crude oil cleared $100 a barrel. Higher crude oil prices are a key risk for net energy importer India.
“Today’s market is just reflecting what is happening on the crude side and the global risk-off sentiment taking a backseat temporarily,” said Aishvarya Dadheech, founder and chief investment officer at Fident Asset Management.
READ MORE: Indian shares suffer worst fall in a month
“However, we will only see a major relief rally in the Indian market when crude goes down to $70 or below, and that will only happen when we have more clarity on the outcome of the war,” Dadheech said.
Iran’s Revolutionary Guards said on Tuesday they would not let any oil out of the Middle East until U.S. and Israeli attacks cease, prompting U.S. President Donald Trump to threaten to hit Iran “twenty times harder” if it blocked exports.
Brent futures were down 9.1% at $89.98 a barrel on Tuesday.
Fourteen of the 16 major sectors registered gains. The broader smallcaps and midcaps rose 2.1% and 1.6%, respectively.
Top lenders and index heavyweights HDFC Bank and ICICI Bank powered index gains on the day, climbing 1% and 2.6%, respectively, after falling about 3% in the prior session.
The rupee also rose 0.57% to 91.8050 per U.S. dollar, while government bonds gained, with the benchmark 10-year yield falling more than 5 basis points.
The drop in oil prices also drove paint stocks and airline stocks higher as crude is a major raw material for both industries. Budget carrier IndiGo gained 3.5%, while Asian Paints rose 3.3%. They fell 3.8% and 2.6%, respectively, on Monday.
Among individual stocks, Dixon Technologies jumped 11.3% on securing government approval for a joint venture with a Chinese firm.
Dr Reddy’s Laboratories gained 2.1% after media reports said the Delhi High Court cleared the company to manufacture generic semaglutide for export.
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