Will the Sensex and Nifty Continue to Rise Despite Mideast Tensions?

Mumbai, June 16 (NationPress) The Indian stock markets exhibited remarkable strength on Monday, even amidst escalating tensions between Israel and Iran. Investors are maintaining their focus on long-term fundamentals during these volatile times.

Both the Sensex and Nifty concluded the day with impressive gains of nearly 1 percent each, reflecting investor optimism despite geopolitical uncertainty.

The Sensex surged by 677.55 points or 0.84 percent, closing at 81,796.15, after reaching an intra-day peak of 81,865.82.

Meanwhile, the Nifty rose by 227.9 points or 0.92 percent, finishing at 24,946.50.

Rupak De from LKP Securities noted, "The index saw a significant rally as it reclaimed the 21-EMA after a brief dip below it." He added that, currently, with investors keenly awaiting the Fed's commentary following the rate announcement, a major directional shift is not anticipated at this time.

“However, a rally towards 25,350 appears highly likely once the Nifty surpasses the 25,000 mark. On the downside, support is positioned at 24,850," De stated.

The broader market also performed well, with the Nifty Midcap100 increasing by 0.93 percent and the Nifty Smallcap100 rising by 0.95 percent.

All sectoral indices finished in the green, with the Nifty IT index leading the way, up by 1.57 percent, followed by Realty (1.32 percent), Oil and Gas (1.11 percent), and Metal (1.07 percent).

Other sectors, including banking, energy, FMCG, pharma, and media, also closed higher, indicating broad-based market buying.

Among the notable gainers on the Sensex were Ultratech Cement, Tech Mahindra, HCL Tech, TCS, Kotak Mahindra Bank, and Infosys, with some appreciating by as much as 2.4 percent.

Conversely, Tata Motors was the biggest loser, plummeting by 3.76 percent, with Sun Pharma also ending the day lower.

The India VIX, often referred to as the market's "fear index" that gauges expected volatility, decreased by 1.6 percent, settling at 14.83. A decline in the VIX suggests a more stable market outlook in the near term.

Vinod Nair, Head of Research at Geojit Investments Limited, expressed that despite ongoing geopolitical tensions between Israel and Iran, the market continued its upward trajectory, buoyed by gains in large-cap stocks.

"Geopolitical events in the Middle East are expected to sway near-term market sentiment, with any indications of de-escalation being closely monitored. Small-cap stocks may underperform in the short term due to their high valuations and lack of immediate catalysts," he noted.