Sensex, Nifty likely to rebound on Wednesday: Here's why
What's the story
The Indian stock market's benchmark indices, the Sensex and Nifty, are expected to open higher on Wednesday. This comes after a two-day losing streak. The expected rise is due to positive global cues and a slight dip in crude oil prices. The previous trading session had seen both indices close sharply lower on Monday amid weak investor sentiment over the West Asia conflict and rising crude oil prices.
Market downturn
Recap of Monday's market performance
In the last trading session, the Sensex plummeted by 1,635.67 points or 2.22% to close at 71,947.55. During intra-day trade, it had even fallen as much as 1,809.09 points or 2.45% to hit a low of 71,774.13. The Nifty also witnessed a major decline of 488.2 points or 2.14%, settling at 22,331.40 for the day amid weak investor sentiment due to geopolitical tensions, rising crude oil prices globally and high inflationary pressures impacting growth prospects across emerging markets like India.
Market support
Positive developments in Iran conflict and RBI relaxations
The Reserve Bank of India (RBI) has postponed the implementation of capital market exposure norms for banks to July 1. It has also relaxed some conditions for brokers, allowing them to use bank guarantees with a margin of 50% until then. Meanwhile, a Wall Street Journal report said US President Donald Trump is willing to end the Iran conflict even if the Strait of Hormuz remains mostly closed for now.
Market recovery
Global markets show strength ahead of US data
Global markets showed signs of strength with NASDAQ-100 futures rising 0.83%, S&P 500 futures up by 0.87%, and Dow Jones futures gaining 0.93%. The Gift Nifty was also trading higher by around 0.5% at about 2pm India time. This global market firmness could provide a much-needed boost to the Indian stock market on Wednesday after its recent losses due to geopolitical tensions and rising crude oil prices and weak Asian markets and continued foreign fund outflows.