Markets rise as Iran crisis stays in limbo – News Air Insight

Mumbai: Indian equities snapped a three-day losing streak and rose 0.8% on Monday, mirroring gains in the rest of Asia, as markets shrugged off fresh uncertainty after the second round of peace talks between the US and Iran stalled again. Brent crude futures rose 2.2% to $ 107.66 a barrel, after having jumped 14.6% over the past week.

The NSE Nifty 50 rose 0.8%, or 194.75 points, to close at 24,092.70, while the S&P BSE Sensex gained 0.8%, or 639.42 points, to end at 77,303.63.

Asian markets also advanced. South Korea climbed 2.2%, Taiwan gained 1.8%, and Japan rose 1.4%, while China was up 0.2%. Hong Kong slipped 0.2%. The gains came even as Donald Trump cancelled plans to send a US delegation to Pakistan for talks with Iran.

“Gains in global markets led to some buying interest in beaten-down heavyweights like Reliance Industries and Sun Pharmaceuticals,” said Ajit Mishra, SVP Research, Religare Broking. Reliance shares rose 2.9%, and Sun gained 7%.

All sectoral indices ended higher. Nifty Pharma jumped 2.6%, led by Sun Pharmaceuticals, the top gainer on the index. Nifty Consumer Durables rose 2.5%, while healthcare and realty indices gained 2.4% each. Nifty IT climbed 2.2%, and Nifty Auto advanced 1.6%.

The India VIX volatility index fell 6.7% to 18.4, indicating easing near-term risk expectations.

“It is important for Nifty to hold the levels above its 20 DMA of 23,950 for further recovery towards 24,600-24,800 levels,” Mishra said. “If it fails to hold these levels, then declines up to 23,500 are likely.” Out of 4556 shares, 3023 advanced, and 1345 declined. The Nifty Midcap 150 index rose 1.5%, while the Nifty Smallcap 250 gained 1.8%. Over the past week, the two indices have advanced 0.7% and 1.7%, respectively.

“Many small-cap stocks, which had come under pressure amid the US-Iran tensions, had turned attractive from a valuation standpoint,” said Saurabh Patwa, head of Equities and Portfolio Manager at Quest Investment Managers. “They seem to be getting traction as much of the risk appears priced in.”

Foreign portfolio investors sold shares worth a net ‘1,151.48 crore on Monday, while domestic institutional investors bought shares worth ‘4,123.92 crore. So far in April, foreign investors have sold shares worth ‘56,172 crore.

“Uncertainties, particularly around inflationary pressures, are likely to persist, and short-term volatility cannot be ruled out,” Patwa said. “However, companies delivering strong earnings should continue to attract investor interest.”