Snapping a three-day losing run, the BSE Sensex today surged 387.69 points on the back of lower crude oil prices after a historic deal between world powers and Iran on its controversial nuclear programme.
Buying was all-round with 12 of the 13 sectoral BSE indices ending in the green. Capital goods, banking, realty and PSU shares saw heavy buying. Oil&gas shares, including PSU fuel companies, were in the limelight.
Overall, nearly 6 stocks gained out of every 10 traded on BSE, helping investors gain Rs 1 lakh crore in the session.
The BSE Sensex, which had shed 673.43 points in the previous three sessions, shot up by 387.69 poins, or 1.92 per cent to end 20,605.08 -- near the day's highs. 27 of the 30 index constituents closed up. ICICI Bank, ITC,HDFC, HDFC Bank and Larsen & Toubro contributed over 237 points of the index's surge.
Brokers said after the recent fall in markets, the Iran-deal news was lapped up by bullish investors and markets moved up on strong volumes. Fears of US stimulus tapering were also shrugged off, they added.
Indian stocks emerged as the star performer in Asian and European markets as falling oil prices eased inflation concerns. Reacting to the historic deal, Brent crude fell by more than 2 per cent in early Asian trade to USD 108.5 levels.
On similar lines, the broad-based National Stock Exchange index Nifty spurted by 119.90 points, or two per cent, to 6,115.35.
"Positive global cues and strong opening of European indices also boosted market sentiments. The rupee too firmed up against dollar and was seen trading near 62.5 level," said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio.
Among PSU oil stocks, Hindustan Petroleum surged 6 per cent, Bharat Petroleum 4.45 per cent, Indian Oil by 2.52 per cent and Oil India by 1.44 per cent.
Sectorally, the BSE Capital Goods index gained the most by rising 3.82 per cent on the back of Crompton Greaves, BHEL and L&T. It was followed by BSE Bankex 3.63 per cent and BSE Realty 2.28 per cent. IT shares, however, had a forgettable day with Infosys down 0.7 per cent.
Sanjeev Zarbade, Vice President- Private Client Group Research, Kotak Securities:
The Sensex rallied 385 points led by strong outperformance by the Bank Nifty as well as Capital Goods stocks. Among banks, ICICI Bank and SBI were the leading gainers. In Capital Goods, BHEL, L&T, CG and Siemens were the top gainers. The rupee strengthened while bonds prices firmed up. Global cues were also positive. Over the weekend, Iran and six world powers reached a breakthrough deal early on Sunday to curb Tehran's nuclear program in exchange for limited sanctions relief. Washington has pledged not to impose new nuclear-related sanctions over the next six months, so long as Iran sticks to its side of the deal. Following this development, Crude prices have fallen 2% to USD 108 per barrel. Going forward, important events include the 2Q GDP growth release and later followed by the election results on Dec 8.
BSE Sensex surges as oil prices drop after Iran deal (Reuters)
BSE Sensex rallied on Monday as a drop in global crude prices after Iran's deal with world powers to curb its nuclear programme sparked hopes of reduced inflationary pressures and a narrower current account deficit (CAD) at home.
Bank shares led the gains on hopes falling inflation would reduce the chances of continued rate hikes from the Reserve Bank of India.
Shares of state-run oil marketing companies also gained after Brent crude dropped more than $2 a barrel on Monday. Indian Oil Corp gained 2.7 percent, while Hindustan Petroleum Corp surged 5.8 percent.
The NSE Nifty was up 2 percent as of 0946 GMT, while the benchmark BSE index was 1.9 percent higher.