Stock markets surge over 2% as drop in oil prices, rally in Asian peers cheer investors

Mumbai: Equity benchmark indices Sensex and Nifty surged over 2 per cent on Wednesday buoyed by a drop in crude oil prices and a rally in Asian markets amid hopes of de-escalation in the West Asia war.

Extending its previous day's rally, the 30-share BSE Sensex jumped 1,667.14 points or 2.25 per cent to 75,735.59. The 50-share NSE Nifty surged 522.35 points or 2.27 per cent to 23,434.75.

From the 30-Sensex firms, Titan, Mahindra & Mahindra, Trent, UltraTech Cement, HDFC Bank and Bajaj Finance were the biggest gainers.

Tech Mahindra was the only laggard.

Brent crude, the global oil benchmark, dropped 4.07 per cent to $100.2 per barrel.

In Asian markets, South Korea's benchmark Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index were trading in positive territory.

The US market ended lower on Tuesday.

"Hope is returning to the market with indications of de-escalation in the conflict. Remarks from President Trump and from the Iranian regime indicate that the conflict might end soon. Particularly the reiteration from Iran that 'non-hostile ships can transit the Strait of Hormuz' is good news that will mitigate India's energy concerns.

"These positive geopolitical developments have reflected in sharp decline in Brent crude to around $98," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 8,009.56 crore on Tuesday, according to exchange data. Domestic Institutional Investors (DIIs), however, bought stocks worth Rs 5,867.15 crore.

"The Indian stock market opened on a positive note with a gap-up, extending Tuesday’s strong recovery, supported by optimism around potential de-escalation in Middle East tensions," Ponmudi R, CEO of Enrich Money, said.

On Tuesday, the Sensex jumped 1,372.06 points or 1.89 per cent to settle at 74,068.45. The Nifty surged 399.75 points or 1.78 per cent to end at 22,912.40.