Indian Markets Extend Winning Streak Amid Global Optimism and Falling Crude Prices
Indian stock markets continued their upward momentum for the second consecutive session on Thursday, March 6, driven by positive global cues, cooling crude oil prices, and fresh liquidity measures by the Reserve Bank of India (RBI). After months of relentless selling pressure, which had made India the worst-performing major market since late September, valuations have now reached more attractive levels, encouraging value investors to step in.
Stock Market Performance Overview
The benchmark indices closed in the green, with the Nifty 50 soaring 0.93% to settle at 22,544 points, while the Sensex climbed 0.83% to close at 74,340. Broader markets also followed suit, as the Nifty Midcap 100 inched up 0.37% to 49,348, while the Nifty Smallcap 100 outperformed with a 1.32% surge to 15,400.
Global Cues Spark Market Optimism
A significant development in the global trade landscape helped fuel risk-on sentiment across markets. U.S. President Donald Trump announced a one-month exemption for Canadian and Mexican automakers from his 25% tariffs, provided they adhere to existing free trade agreements. This announcement spurred a rally in U.S. and European equities, lifting Asian markets along with it.
Crude Oil Prices Crash, Benefiting Key Sectors
One of the biggest catalysts for Thursday’s rally was the steep decline in crude oil prices. Brent crude futures tumbled below $70 per barrel, marking a three-year low. The sharp decline came after OPEC+ revealed plans to gradually unwind its voluntary production cuts, aiming to restore 2.2 million barrels per day (mbpd) of supply over the next two years. Since 2022, the alliance had implemented 5.9 mbpd in supply cuts, making this a significant shift in strategy.
As a result, Brent crude slumped 6.5% over four sessions, hitting its lowest level since December 2021, while WTI crude slid 5.8%, marking its weakest point since May 2023.
This drop in oil prices proved to be a boon for crude-sensitive stocks such as Asian Paints and BPCL, which surged 3-5%. Lower input costs enhance profitability for sectors like paints, aviation, and oil marketing companies, boosting investor sentiment.
Banking & NBFC Stocks Rally on RBI’s Liquidity Boost
The RBI’s decision to inject ₹1.9 trillion into the banking system through open market operations and USD/INR swaps played a crucial role in strengthening banking stocks. This follows the central bank’s February 28 decision to conduct a $10 billion swap, which had already bolstered long-term liquidity in the financial system.
The Nifty Bank index rebounded 0.3%, reversing early losses, while top financial stocks like Shriram Finance and Bajaj Finserv climbed around 2% each.
Sectoral Performance: Metals, Energy, and FMCG Lead the Charge
Among sectoral indices, Nifty Metal posted the strongest gains, jumping nearly 3%, fueled by a weaker U.S. dollar and optimism surrounding China’s stimulus measures. The U.S. dollar index hit a four-month low, further supporting emerging markets like India.
Other key gainers included:
- Nifty Energy & Nifty Oil & Gas: Up 2% each, driven by falling crude prices.
- Nifty FMCG, Media, and Pharma: Rose 1-2%, benefiting from broader market optimism.
- BSE Smallcap Index: Jumped nearly 2%.
- BSE Midcap Index: Climbed nearly 1%.
Key Stock Movers
- Reliance Industries: Led the charge among heavyweights, rallying nearly 3% on strong gains in the oil & gas sector.
- Asian Paints & BPCL: Surged 3-5%, benefiting from lower crude prices.
- Tech Mahindra: The biggest loser, falling over 2% amid sectoral weakness.
Can the Rally Sustain?
With improving global sentiment, falling crude prices, and proactive liquidity measures by the RBI, Indian markets are on a strong footing. However, investors should remain cautious as volatility persists due to ongoing geopolitical and macroeconomic uncertainties. The next few sessions will be crucial in determining whether the rally can sustain and push indices toward fresh all-time highs.
Stay tuned for more market updates and analysis!
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