Nifty reclaims 10,000-level as geopolitical crisis abates

The benchmarks rallied after there were no signs of further escalation in conflict between India and China.

The Nifty on Thursday reclaimed the 10,000-mark, an important psychological milestone, as shares rallied despite lukewarm global cues. The benchmarks rallied after there were no signs of further escalation in conflict between India and China. The benchmark Sensex rose 700.13 points, or 2.09%, to close at 34,208.05, while the broader Nifty was up by 2.13%, or 210.5 points, to close at 10,091.65.

Thursday’s weekly expiry saw the equity markets rise on strong volumes with the futures and options segment witnessing volumes worth Rs 33.8 lakh crore, data from NSE showed. This is against the six month average of Rs 13.9 lakh crore. The India volatility index (VIX) declined to close at 31.58 against Wednesday’s close of 33.35.

According to Jay Purohit, assistant vice president — technical and derivatives research, Motilal Oswal Financial Services, India VIX had started moving higher in the previous five trading sessions but is still below 41 to 43 zone. “India VIX has started moving higher from the last five consecutive sessions and moved above 33 levels. However, it is still moving below its major hurdle of 41-43 zone. Further rise in the volatility index may result into roller-coaster move in the market,” said Purohit.

Foreign portfolio investors (FPIs) till June 17 inflows stood at $2.45 billion in total. On Thursday, FPIs bought stocks worth $48.85 million, provisional data on the exchanges showed whereas domestic institutional investors bought stocks worth $149.75 million.

In a less volatile trading session, the markets, after a gap down opening in the first hour of the trading session, rose throughout the day. After Thursday’s rally, the markets have turned positive for the week rising by around 2.9% in the last four trading sessions. The Indian indices had a lacklustre performance for the last two trading sessions as the Sino- Indian tensions were on the rise after 20 Indian soldiers were killed at the Galwan Valley in Ladakh. At the same time, other global markets were trending upward on positive global cues.

Rusmik Oza, executive vice president — head of fundamental research, Kotak Securities, said, “The markets went up today because of the weekly expiry as well as the fact that there was no new escalation between India and China at the border. Additionally, the markets played catch up with the global markets since we had two subdued sessions where we could not perform because of the conflict at the border. Even in the 2017 Doklam conflict, the equity markets declined for a short period and continued their upmove.” Additionally, market experts stated that the postponement of the AGR case and the Supreme Court hearing on interest waivers also helped keep the market’s short-term mood positive.