Indian equity benchmarks Sensex and Nifty 50 posted sharp gains on Thursday. The BSE benchmark index, Sensex, opened at 56,242, down nearly 1,600 points and was up 1,350 points near the 56,000 level. The NSE Nifty had reclaimed the 16,700 level and was up nearly 400 points.
Major benchmark indices continued to extend their two-day rally on hopes of a peace deal ahead of planned Russia-Ukraine diplomatic talks. The sharp fall in crude oil prices and a strong lead for the BJP in the state results have further fueled the bullish sentiments.
Investors’ enthusiasm in BJP’s race
The market jumped for the third day in a row as the BJP was leading in four of the five states, including Uttar Pradesh, in the recently concluded elections. As per the latest trends of vote counting, BJP was leading in UP with 270 seats. It was followed by SP (126 seats) and BSP (3 seats). To form a government in the state, a party or alliance has to win 202 out of 403 seats. BJP was leading in Uttarakhand, Manipur and Goa also, though AAP was leading in Punjab.
Elaborating on the emerging assembly election trends for investors Nitin Rao, CEO, Incred Wealth said: “Many states are showing their overwhelming acceptance for the work done by the ruling party which is a good omen for the investors. The term as such would discount the continuation of the previous general elections. An interesting sub-trend is also the emergence of a new credible alternative to existing parties on the national stage with populist policies around management efficiency. Both philosophies will focus on development as well as Efficiency in our governance practices is a good long-term indicator for investment in India.”
Crude oil prices fall
Global crude oil prices fell below multi-year highs after the United Arab Emirates (UAE), a member of the Organization of the Petroleum Exporting Countries (OPEC), said it favored a boost to production. On Wednesday, the May contract for Brent futures on the Intercontinental Exchange (ICE) was down 13.2 per cent at $111.14 a barrel. This was the biggest drop in a single day since April 2020.
Brent crude futures rose $3.10, or 2.8 percent, to $114.24 a barrel after trading in a range above $5. The benchmark contract fell 13 per cent in the last session in its biggest one-day fall in nearly two years. US West Texas Intermediate (WTI) crude futures were up $1.58, or 1.5 percent, at $110.28 a barrel, after trading in a range of more than $4.
In addition, prices fell as the head of the IEA said the agency could tap oil stocks further. Additionally, prices fell further on news that Russia and Ukraine were moving towards diplomacy. Meanwhile, a fall in US oil reserves prevented a further fall in prices.
Russia-Ukraine peace talks
Market participants also expect a positive outcome in the Ukraine-Russia talks. Days after Russia invaded Ukraine, Russia announced a new ceasefire in Ukraine to allow civilians to flee besieged cities, and Ukraine’s president said he was concerned about the question of NATO membership for his country. have calmed down.
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