Sensex, Nifty opening: Stock market likely to rally today. Here's why

Stock markets are likely to open higher today as crude oil falls below $100 and global markets rally. Here's what is driving Sensex and Nifty today.

In Short

• Stock markets to open higher on Wednesday following global rally
• Crude oil prices fall below $100 easing inflation worries
• US-Iran ceasefire announcement boosts investor optimism

Stock markets are likely to open higher on Wednesday, supported by strong global cues and a sharp fall in crude oil prices after a ceasefire was announced in the West Asia war.

Early indicators suggest a strong start. GIFT Nifty futures were trading at 23,825 as of 7:49 am, pointing to an opening nearly 3% higher than Tuesday’s close of 23,123.65 for the Nifty 50.

Asian markets also showed strong gains, rising about 4%, as global sentiment improved after easing tensions in the Middle East.

The main trigger for the rally is the fall in crude oil prices, which slipped below $100 per barrel.

This came after US President Donald Trump agreed to a two-week ceasefire with Iran, with both sides moving towards a possible long-term agreement.

CRUDE OIL FALL POSITIVE FOR INDIA

Lower oil prices are positive for India, as the country imports a large part of its crude needs. A drop in prices can ease pressure on inflation, company costs and the overall economy.

The expected rally comes after a period of weakness in markets.

Since the Iran conflict began on February 28, both the Sensex and Nifty have fallen about 8.2%. During the same time, the rupee has slipped to record lows due to high crude prices and strong foreign outflows.

Oil prices had earlier moved above $100 per barrel, raising concerns about economic growth and company earnings in India.

RBI POLICY DECISION IN FOCUS

Investor attention will now shift to the Reserve Bank of India’s policy decision, which is scheduled for 10 a.m. IST.

The central bank is widely expected to keep interest rates unchanged as it assesses the impact of global developments, especially the Iran conflict.

At its previous policy meeting on February 6, the RBI had kept interest rates unchanged at 5.25%.

YES BANK, in its latest report, highlighted how the economic outlook has changed in recent months.

"A huge transition in India’s macro narrative has occurred between the February policy to now. In February, MPC members expressed confidence in growth while no risk was seen from inflation. The war in West Asia has led to oil prices moving higher and a sharp INR depreciation and its ramifications are likely to be felt across macro variables and financial markets."

The report added that higher oil prices and supply chain disruptions could slow growth in FY27 and affect domestic manufacturing.

"There are sector specific problems out of supply chain disruptions, that monetary policy alone cannot address. Rightly so, fiscal policy has also moved in to share the burden by absorbing some of the oil price impact by keeping retail prices of petrol and diesel unaffected. However, prices on bulk sales of diesel and commercial LPG prices have been raised."

On inflation, the report said, "We assess the impact on inflation to be in the range of 35-50 bps from our base case of ~4% that could boost Headline CPI to 4.5-4.8%."

It added that the April policy is likely to remain unchanged, with a cautious tone from the central bank.

While the opening is expected to be strong, markets may remain sensitive to global developments and cues from the RBI.

Investors will closely track the central bank’s growth and inflation outlook, which could guide market direction in the coming sessions.

- Ends