SENSEX jumps 550 points, NIFTY50 opens at 23,928; check key factors behind today's market rebound

At 9:15 am, the benchmark NIFTY50 index opened 0.68% or 160 points higher at 23,928.40 points, compared to 23,767.45 points at the previous stock market close, according to NSE data.

While the BSE SENSEX index opened around 0.71% or 550 points higher at 76,608.98 points on Monday’s market, in comparison to 76,059.77 points at the previous equity market close last week, as per the exchange data.

As of 9:35 am, the NIFTY50 was trading 0.72% higher at 23,938 points, while the SENSEX was up 0.79% to 76,663 points during the early market hours on July 27.

Before the opening bell, the GIFT NIFTY futures (August contract) were trading 0.66% higher at 23,964, as investors focused on the positive recovery of the benchmark after last week’s losses over crude oil prices surging above $100 per barrel (bbl) and the US-imposed tariffs on its trading partners.

Key focus of equity market investors will remain on monitoring the crude oil supply and prices amid the ongoing escalations this week. Traders will also look out for any signs of a potential peace deal or a new ceasefire agreement between the United States and Iran, while also analysing the Q1 earnings report of domestic companies.

Top gainers & losers today

Stocks like InterGlobe Aviation (Indigo) up 3.4%, Infosys up 3.3%, Asian Paints up 2.5%, Eternal up 2.5%, TCS up 2.4%, Bajaj Finance up 2.3%, Max Health up 2.2%, and Tech Mahindra up 2.1% were among the early market gainers on Monday, as per NSE data.

While ONGC down 1.9%, SBI Life Insurance down 0.38%, Bajaj Auto down 0.27%, and ICICI Bank down 0.15% were among the losers during the early market session, according to the exchange data.

Out of the 50 stocks listed in the benchmark NIFTY50 index, 46 stocks were trading in the positive territory, while the remaining 4 stocks were down in the red, as of the morning market hours.

Key factors behind today's rebound

Crude oil drops over 6%

Monday’s domestic equity market rebound comes against the backdrop of crude oil prices falling in the global market, which in turn supports the companies importing the energy source from foreign countries.

Global benchmark Brent crude oil prices declined 6.3% to their intraday low of $85.82 per bbl during the early market hours, India time, compared to $91.68 per bbl at the previous commodity market close.

At 9:49 am (IST), the Brent crude oil futures were trading 4.2% lower at $87.79 per bbl on Monday’s market, compared to the previous market session, according to Investing.com data.

Commodity market investors were reacting to reports of the United States temporarily pausing their military strikes on Iran after 13 consecutive rounds of night attacks against the West Asian country to diminish the threat it poses to commercial vessels transiting the Strait of Hormuz.

Rupee strength

The strength in the Indian rupee on Monday’s market further supported the equity market sentiment as the domestic currency gained 0.35% of its value against the benchmark US dollar amid the temporary cool-off cues in the global market.

According to Investing.com data, the Indian currency strengthened 0.35% to 96.22 against the US dollar, in comparison to 96.56 at the previous currency market close. At 9.59 am (IST), the rupee was trading 0.16% stronger against the US dollar at 96.49 on July 27.

Global market investors are likely shifting their investments away from safe-haven assets like the US dollar into other emerging market currencies like the rupee, in turn increasing the currency’s demand in the market amid the pause in West Asia strikes.

Global market cues

The overall global market sentiment remained positive on Monday, with the Asian markets trading in the green as investors now focus on the upcoming US Federal Reserve monetary policy outcome amid the renewed tensions in West Asia.

MarketWatch data showed that indices like Japan’s Nikkei 225 were up 0.23%, Hang Seng up 0.77%, Shanghai up 0.40%, and Singapore’s FTSE up 0.16% on July 27.

West Asia update

Mike Waltz, the US ambassador to the United Nations, on Sunday said that the United States is now allowing talks with Iran after the temporary pause in military strikes, according to media reports.

Due to the recent escalations in West Asia and after 13 rounds of US strikes on Iran, the oil supply via the Strait of Hormuz has been facing a threat, with around 20% of the global crude oil traffic passing through the trading passage.

Reports also mentioned that Iran and Oman held talks over controlling the trading route; however, so far the traffic flow remains unchanged despite the attacks.

IT sector support

IT stocks in India were witnessing major buying interest from investors after a US-based technology and software company, ServiceNow, posted healthy earnings, while the management raised its revenue guidance.

Stocks like OFSS, Infosys, Mphasis, Coforge, Tech Mahindra, TCS, and HCL Tech were trading with gains on Monday’s market, as the benchmark NIFTY IT index gained 2.6% to its early market high of 29,519.65 points.

US-based IT companies raising their guidance acts as somewhat of a positive trigger for Indian IT stocks, as the firms cater to most clients based out of America.