Benchmark stock market indices extended their rally on Thursday, tracking global markets which have risen on hopes of Iran-US peace talks resuming. Crude oil prices have also fallen, lifting market sentiment.
The S&P BSE Sensex added 550.07 points to 78,661.31, while the NSE Nifty50 was up by 158.10 points to 24,389.40 as of 9:27 am.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said that the message from the crude market and the US stock market is that the West Asian conflict is unlikely to last long.
“Brent crude is down to $95 level from the recent peak of $119. The S&P 500 set a new record yesterday at 7022. Nasdaq is also at a new record high. The stock market is discounting an early end to the conflict,” he added.
In India Nifty has rebounded from the 12% correction after the war. Nifty is up by about 2000 points from the lows touched around 30th of March.
It is important to note that the mid and small caps have outperformed the large caps. In fact the small cap index is slightly above the pre-war level and mid cap index is only marginally lower by around 0.5% while Nifty is down by about 3.8% from the pre-war levels. The underperformance of the large caps is due to the big FII selling. The outperformance of the broader market may continue in the near-term.
Investors should watch the stocks which are hitting 52-week highs even in a weak market. Such stocks reflect fundamental strength and accumulation by smart money.