Indian benchmark indices, the Sensex and Nifty, commenced trading on Thursday with significant gains, buoyed by positive signals from global markets. Early trading saw the Sensex surge by as much as 458 points, while the Nifty climbed above the 23,550 mark, briefly touching 23,581.50.
Despite the strong opening, market enthusiasm was somewhat tempered by ongoing concerns regarding the fragile US-Iran ceasefire and the continued depreciation of the Indian rupee against the dollar.
Top Performers and Market Movers
Among the constituents of the Sensex, Adani Ports led the charge, experiencing a 1.48% jump, with its shares trading at Rs 1761.75. Bharti Airtel also saw strong performance, rising by 1.41%. Other notable gainers included Mahindra & Mahindra (M&M) with a 1.26% increase, Power Grid up 1.23%, and Trent gaining 1.16%.
Rupee Depreciation: A Macro Threat
However, analysts highlighted the weakening rupee as a significant challenge for the Indian economy. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd., expressed concern, stating, “Continuous rupee depreciation is becoming a major macro threat for the economy. This year began with rupee at 90 to the dollar. Since then it has steadily depreciated to the present level of 95.70 to the dollar.”
Vijayakumar further warned, “If crude remains elevated for an extended period, rupee will move to 100. The other major drag on the rupee is the sustained selling by Foreign Portfolio Investors (FPIs) in the Indian market.”
Global Market Cues and Previous Session
Broader Asian markets mostly traded higher on Thursday, contributing to the positive domestic sentiment. Japan's Nikkei 225 recorded a 0.28% gain, while Hong Kong's Hang Seng rose 0.18%. Wall Street also closed mostly higher overnight, with the S&P 500 gaining 0.58% and the Nasdaq Composite up 1.20%, though the Dow Jones Industrial Average saw a slight dip.
In the preceding session on Wednesday, both Indian benchmarks had posted marginal gains. The Sensex had edged up 49.74 points (0.07%) to close at 74,608.98, and the Nifty had risen 33.05 points (0.14%) to settle at 23,412.60.
Technical Outlook and Caution
Aakash Shah, Technical Research Analyst at Choice Equity Broking Private Ltd., offered a cautious technical perspective. He noted, “Overall, the technical setup suggests a positive opening due to supportive global cues, but the broader market structure remains weak as key indices continue to trade below important moving averages amid elevated volatility and persistent selling pressure.” Shah concluded that traders would likely remain cautious until the Nifty decisively reclaims the 24,000 mark.