Sensex rallies 1,187 points on Middle East peace hopes

MUMBAI: Peace hopes in West Asia led to a global rally since late Tuesday that spilled over to the Indian market on Wednesday and boosted investor sentiment on Dalal Street. As a result, stocks rallied smartly with the sensex closing 1,187 points (1.7%) up at 73,134 points. The day’s rally in the stock market was also boosted by some strengthening of the rupee against the dollar while crude prices in global markets showed a softening trend.

The day’s four-digit points gain in sensex came despite foreign funds continuing to take money out of Indian stocks. At close of trading, net outflow by foreign portfolio investors (FPIs) from equities was Rs 8,331 crore, BSE data showed. In comparison, domestic funds were net buyers at Rs 7,172 crore.

Since Tuesday ( a trading holiday), there were indications that the US may step back from its aggressive stance in the war against Iran. This raised hopes among investors globally that the current geopolitical uncertainty, including one of the worst energy crises that the world has faced, could soon start to taper off. As a result, crude prices started coming down, while rupee, combined with RBI’s decisions to rein-in speculative trades, started strengthening. All these helped the day’s rally, market players said. The day’s upward move added about Rs 9.6 lakh crore to investors’ wealth with BSE’s market capitalisation now at Rs 422 lakh crore, official data showed.

With the US market showing northward movement, market players expect another session of gains for Indian stocks on Friday, provided no negative news hits the ticker overnight.