Equity benchmark indices Sensex and Nifty surged in early trade on Wednesday, mirroring a rally in global markets and a drop in crude oil prices below the USD 100 per barrel mark, amid hopes of renewed diplomatic engagement between the US and Iran.
The 30-share BSE Sensex jumped 1,422.85 points to 78,270.42 in early trade. The 50-share NSE Nifty climbed 438.25 points to 24,280.90.
All the 30-Sensex firms were trading in positive territory during initial trade. InterGlobe Aviation, Infosys, Tata Consultancy Services, Eternal, Larsen & Toubro and Bajaj Finance were the major gainers.
Brent crude, the global oil benchmark, traded 0.26 per cent higher at USD 95.04 per barrel.
"Markets appear to be looking past immediate risks and are instead pricing in the possibility of renewed diplomatic engagement between the US and Iran. This change in narrative has led to a sharp correction in crude oil prices, which is a key positive for India given its dependence on energy imports," Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.
US President Donald Trump has said that the war with Iran is "close to over", asserting that if he pulled up stakes right now, it would take Tehran 20 years to rebuild the country.
"I think it's close to over, yeah. I view it as very close to being over," Trump told Fox News in an interview that will be telecast later Wednesday.
A US media report said on Tuesday that Trump said that a second round of talks with Iran could be held in Islamabad "over the next two days".
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 higher.
US markets ended in positive territory on Tuesday. The Nasdaq Composite jumped 1.96 per cent, the S&P 500 climbed 1.18 per cent, and the Dow Jones Industrial Average edged higher by 0.66 per cent.
"Hopes of resumption of US-Iran talks, Israel-Lebanon talks and crash in Brent crude by 10 dollars in two days augur well for the market in the near-term," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
Stock markets were closed on Tuesday on account of Dr Baba Saheb Ambedkar Jayanti.
Foreign Institutional Investors (FIIs) again offloaded equities worth Rs 1,983.18 crore on Monday after a day's breather, according to exchange data. Domestic Institutional Investors (DIIs) bought stocks worth Rs 2,432.30 crore.
On Monday, the Sensex tumbled 702.68 points or 0.91 per cent to settle at 76,847.57. The Nifty plunged 207.95 points or 0.86 per cent to end at 23,842.65.
