Nifty jumps 1.68%, Sensex gains 1.66% as oil falls and Reliance advances

Key Facts

The Nifty 50 rose 1.68% to 23,440.80 points, and the Sensex gained 1.66% to 75,692.78 points at the close on Monday, November 2, marking their third consecutive session of gains, according to Moneycontrol data. The close was above early trading levels reported by Reuters via MarketScreener; by 9:42 a.m. local time, the Nifty stood at 23,304.90 points and the Sensex at 75,404.64 points. At that time, the indexes were up 1.08% and 1.27%, respectively. The Associated Press reported that the Sensex rose 1% in Monday trading. Gains extended to 15 of the 16 major sectors, while small-cap stocks rose 0.6% and mid-caps 0.8% in morning trading.

Reliance Industries stood out among the session’s drivers, rising 6% in morning trading after the company reported quarterly earnings for the quarter ended in September that exceeded market expectations, according to Reuters via MarketScreener. JPMorgan analysts said the results reflected strength in core margins in the refining and petrochemicals businesses. They added that the company’s valuations were attractive, linking its performance to margins in its core businesses. In a report on the close, Moneycontrol said the stock rose about 11.5% during the session and contributed more than half of the indexes’ gains. The report also said lower U.S. Treasury yields, a decline in Brent and resilient October goods and services tax collections supported sentiment.

Brent crude fell 3.9% to $109.01 a barrel in early trading, but remained well above about $72 a barrel in late February, before the war, according to the Associated Press. U.S. crude fell 4.1% to $99.82 a barrel over the same period. In a Reuters report carried by MarketScreener, Brent was at $110 a barrel on Monday, after reaching $118 on Friday, October 30, its highest level in six months. The report linked the decline in crude to Iranian-Qatari talks on their third day, aimed at ending the war. Still, the Associated Press said uncertainty over the situation in the Middle East, particularly the reopening of the Strait of Hormuz, continued to weigh on global oil supplies.

Diplomatic developments added an element of optimism to market trading without removing uncertainty over supplies. A market analyst quoted by Reuters said sentiment had improved on hopes of a resolution to the war after consecutive days of talks aimed at ending the conflict. Iran’s foreign minister had said Iranian negotiators discussed a proposal in Qatar that could allow the Strait of Hormuz to reopen within two days if the United States met several conditions. The minister added that there were no direct talks between Tehran and Washington. The Associated Press reported that two Iranian officials, speaking anonymously because of the sensitivity of the talks, said the delegation had left Qatar after days of discussions, while messages continued to be exchanged with the United States through the mediator.

The Indian gains came as other markets had been under pressure recently. In Friday’s session, October 30, the S&P 500 fell 1.8%, the Nasdaq Composite 2.9% and the Dow Jones 1.1%, according to the Associated Press. Over the month preceding the agency’s report, the Nikkei 225 fell more than 7% and the Kospi declined more than 16%. In India, broader sector gains and Reliance’s advance drove the indexes higher, with both closing above their morning readings. Early trading data had shown gains in both indexes before the Nifty ended the session up 1.68% and the Sensex up 1.66%.

Investors are next looking to the result of the U.S. midterm elections scheduled for Tuesday, November 3, according to the Associated Press. On Iran, a Chinese Foreign Ministry spokeswoman said Beijing would send a special envoy to Iran, Oman and Saudi Arabia in early to mid-November. The announcement comes as reopening the Strait of Hormuz remains tied, according to the Iranian statement, to the United States meeting the proposal’s conditions. Early trading figures show Brent fell to $109.01 a barrel, while remaining above its prewar level. India’s two indexes ended the session higher, marking a third straight day of gains.