Summary of this article
Sensex, Nifty opened higher as US-Iran negotiations reportedly enter 'final stages'
All major sectors rose, along with gains in midcap and smallcap indices
Strong global equities and a decline in oil prices supported sentiment
Indian equity markets opened higher on May 21, tracking a broad-based improvement in global risk sentiment after US and Iran reportedly entered "final stages" of negotiations.
Investor sentiment improved after reports suggested that tensions around the Strait of Hormuz were easing, with several large oil tankers resuming their movement through the key shipping route. This helped reduce fears of any long-term disruption in oil supply and further supported the fall in crude oil prices seen in the previous trading session.
All Sectors In Green
All sectors were trading in green in early session. As of 10:00 AM, Nifty Realty and Nifty Cement led gains, rising between 1 per cent and 1.50 per cent. Metals, auto, private banks, PSU banks, financial services and media were higher by more than 0.50 per cent. Only Nifty IT was teetering around flat levels, albeit in the green zone.
Nifty Midcap 100 and Nifty Smallcap 100 gained between 0.40 per cent and 0.70 per cent, while Nifty 500, which represents more than 92 per cent of the total free float market capitalisation of all NSE-listed companies.
Crude Oil Price Slips To $105 Per Barrel
Domestic markets also got support from the fall in crude oil prices in the previous session, which had temporarily reduced concerns about India’s import costs.
The international benchmark Brent crude oil futures rebounded slightly on May 21 after witnessing about 5.60 per cent fall in the previous session. As of 10:00 AM, it traded at $105.81 a barrel, up 0.31 per cent from previous close. The US West Texas Intermediate (WTI) rose about 0.14 per cent to 99.14, around the same time.
Oil markets had reacted earlier to remarks from US President Donald Trump, who said that talks with Iran were in "final stages", though he also warned that tensions could rise if an agreement was not reached.
Upbeat Global Indices
A rebound in US and Asian equities also gave domestic equities the initial push.
Wall Street rebounded from a three-day losing streak, led by gains in technology and semiconductor stocks, ahead of Nvidia’s quarterly earnings. The Dow Jones surged 1.31 per cent, S&P 500 closed with 1.08 per cent gains, while the tech-heavy Nasdaq index gained 1.54 per cent.
Asian markets also staged a strong recovery, with MSCI’s All Country Asia Pacific ex Japan rising 3 per cent. South Korea’s KOSPI rallied nearly 8 per cent after labour disruptions eased at Samsung Electronics. Japan’s Nikkei advanced 3.50 per cent, Taiwan's TAIEX jumped nearly 4 per cent, China's CSI 300 gained nearly 1 per cent and Australia's ASX rose 1.50 per cent in early session.
This comes against the backdrop of persistent weakness in the rupee, which hit a fresh record low of 96.96 against the US dollar amid elevated crude prices. However, rupee gained some ground on May 21, with the USD/INR pair slipping to 96.15 level.
