The Sensex and Nifty rose on Monday, September 21, with the Sensex up about 420 points in early trade and market wraps putting its close near 74,859, after six consecutive weekly losses.
One up day is a small piece of evidence. It follows a run in which the weekly declines were each small, so the move back is best read as relief rather than a change of direction.
What changed on Monday was oil. Brent fell about 2.2 percent to roughly 101.56 dollars a barrel, and for an oil-importing country a lower crude price feeds through to the import bill, the rupee and the inflation outlook.
That also shows how exposed the market’s mood is to a single variable. When Middle East tensions push crude up, equities have struggled, and when crude eases, they recover.
The sensible approach is to watch whether crude keeps falling and whether foreign investors return, rather than to treat a single session as a turning point.
Asian markets had closed broadly higher, with South Korea’s Kospi up 1.43 percent and Japan’s Nikkei up 1.38 percent.
InterGlobe Aviation, which runs IndiGo, rose about 1.55 percent to Rs 4,996.50, helped by lower fuel costs.
Sun Pharma rose about 1.39 percent and Reliance Industries about 1.36 percent in early trade.
Adani Ports fell about 2.8 percent, Bharti Airtel about 2.3 percent and Wipro about 1.8 percent.
The rebound followed a sixth consecutive weekly loss for the Sensex and Nifty, the longest such run in about six years for the Sensex.
Investors were also watching the closing of the Rs 22,569 crore NSE IPO, which had drawn liquidity from the secondary market.
Oil-importing India is sensitive to crude prices, since lower prices reduce the import bill and support the rupee and inflation outlook.
Market direction in the coming days is likely to depend on crude oil, foreign fund flows and developments in the Middle East.
Phiroze Jeejeebhoy Towers, Bombay Stock Exchange (representative image), Wikimedia Commons, CC BY-SA 2.0