The Sensex zoomed 635 points and investor wealth rose Rs 2.25 lakh crore with the easing of tensions between the US and Iran.
Though the rally came on the eve of the earnings calendar, experts warned prices would remain volatile on account of West Asia. Besides, there is uncertainty surrounding the third-quarter results, with Infosys the first to make an announcement on Friday. Pre-budget developments will also influence sentiments.
The benchmark indices had been hovering around record levels when their ascent was checked by the escalation in tensions between the US and Iran, which led to a spurt in crude oil prices.
However, global equities soared after President Donald Trump said the US was “ready to embrace peace with all who seek it’’ even as he said that Iran appears to be “standing down’’, a day after the latter fired rockets at American military bases in Iraq following the killing of top Iranian general Qassem Soleimani.
The mood got a further boost with the proposed visit of Chinese vice-premier Liu to Washington next week for the signing of the first round of trade deal with the US.
The 30-share Sensex opened on a strong note at 41216.67 and hit a peak of 41482.12 — a gain of over 664 points. It closed at 41452.35, up 634.61 points, or 1.55 per cent. On the NSE, the broader Nifty surged 190.55 points, or 1.58 per cent, to 12215.90.
The gains led to investors wealth rising Rs 2.25 lakh crore and the market capitalisation at BSE moving up to Rs 1,57,06,155.38 crore.
Barring four stocks in the Sensex pack, which ended in the red, the rest rose up to 4 per cent. ICICI Bank was the top gainer as its share settled 3.89 per cent higher at Rs 546.30. It was followed by IndusInd Bank, SBI, M&M, Maruti Suzuki and Axis Bank.
However, analysts remain cautious.
“Equity markets bounced back sharply as crude prices slumped after US-Iran tensions appeared to have eased. Even the broader markets participated in the rally with the Nifty Midcap 100 and Nifty Small-cap rising 1.4 per cent and 2.1 per cent, respectively.
“Going ahead, markets would continue to be volatile in the short term because of the tension in West Asia and the earnings season. Investors would also be watching out for pre-budget developments which would influence the market,’’ said Siddhartha Khemka, head — retail research, Motilal Oswal Financial Services.
Meanwhile, the rupee appreciated 48 paise to close at 71.21 against the dollar. At the inter-bank forex market, the rupee opened strong at 71.44 per dollar against the previous close of 71.70. During the day, it traded in the range of 71.52 and 71.17 and finally settled at 71.21 to the dollar.
