Indian equity benchmarks Sensex and Nifty50 clocked sharp gains on Thursday. The BSE benchmark index, the Sensex, opened with a huge gap-up of almost 1,600 points at 56,242 and was up around 1,350 points near 56,000-levels. The NSE Nifty had reclaimed the 16,700-level and was up nearly 400 points.
The key benchmark indices continued to extend their two-day rally in hopes of a peace deal ahead of the planned Russia-Ukraine diplomatic talks. The sharp drop in crude oil prices and strong leads for BJP in the state results has further aided the bullish sentiment.
Investors Cheer as BJP Races Ahead
The market surged for the third straight day as the BJP was leading in four out of five states, including Uttar Pradesh, in the recently-concluded elections. As per the latest vote counting trends, BJP was leading in UP with 270 seats. It was followed by SP (126 seats) and BSP (3 seats). A party or coalition needs to win 202 out of 403 seats to form government in the state. BJP was also leading in Uttarakhand, Manipur and Goa, though AAP was leading in Punjab.
Explaining what effect the emerging assembly election trends meant for investors, Nitin Rao - CEO, InCred Wealth, said: “Many of the States are showing their overwhelming acceptance to work done by the ruling party which is a good omen for investors going into the medium term as markets will discount continuity past general elections. An interesting sub-trend is also the emergence of a new creditable alternative to the existing parties on the National Stage with pro-populist policies around management efficiency. Both philosophies will lead to development focus as also efficiency in our governance methods, a good long-term indicator for Investments in India."
Drop in Crude Oil Prices
Global crude oil prices eased from multi-year highs after the United Arab Emirates (UAE), a member of the Organization of the Petroleum Exporting Countries (OPEC) said it was in favour of boosting production. On Wednesday, the May contract of Brent futures on the Intercontinental Exchange (ICE) settled 13.2 per cent lower at $111.14 per barrel. It was the biggest decline in a day since April 2020.
Brent crude futures were up $3.10, or 2.8 per cent, at $114.24 a barrel after trading in a more than $5 range. The benchmark contract slumped 13 per cent in the previous session in its biggest one-day drop in nearly two years. U.S. West Texas Intermediate (WTI) crude futures were up $1.58, or 1.5 per cent, at $110.28 a barrel, after trading in a more than $4 range.
Further, prices plunged as the head of IEA said the agency could further tap oil stocks. Additionally, prices dropped further on news that Russia and Ukraine are inching towards diplomacy. Meanwhile, a decline in US oil stockpiles prevented further downside in prices.
Russia-Ukraine Peace Talks
Market participants are also hoping for a positive outcome in Ukraine-Russia talks. Days after Russia attacked Ukraine, Russia announced a new ceasefire in Ukraine to let civilians flee besieged cities and Ukraine President has said he has cooled down regarding the question of Nato membership for his country.
Sudhanshu Singh - Director IBBM, said: “One of the factors is the start of the settlement of the war between Ukraine and Russia. This will reduce tensions between the two countries, and international markets will see it as a positive and good move."
Read all minute-by-minute news updates for Uttar Pradesh election results 2022, Punjab election results 2022, Uttarakhand election results 2022, Manipur election results 2022, and Goa election results 2022.
Click here for seat-wise LIVE result updates.