Benchmark stock market indices reversed early losses to trade higher on Monday despite fears of fresh retaliation in the West Asia war, with crude oil prices also surging.
The S&P BSE Sensex was up 168.96 points to 78,662.50, while the NSE Nifty50 gained 21,05 points to 24,374.60 as of 9:30 am.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said that within the deescalation- escalation drama in the West Asian conflict continuing, the market will remain volatile in the near-term.
“With Iran hardening its position again, closing the Strait of Hormuz and threatening to retaliate to US’ seizure of an Iranian ship ‘violating the US blockade’, there is potential for a flare-up in the conflict when the ceasefire ends on April 22.
However, the market signals do not reflect renewed concern and flare up of the conflict. Even though Brent crude has spiked back to $ 95 levels from below $90 on Friday, there is no panic in the crude market.
A significant trend in the market now is the outperformance of the broader market. Nifty Midcap and Nifty Smallcap indices are back to pre-war levels. This is in contrast to Nifty which is still 4% below pre-war levels. Market is responding positively to good results from the broader market space. Even with the uncertainty of the West Asia tensions weighing on the market, particular stocks will respond to good results, particularly when the results beat expectations.
