The Sensex and Nifty 50 extended their recovery to a second consecutive day on March 6, ending the session firmly in the green. This uptrend was largely driven by solid gains in Reliance Industries, along with strong support from crude-sensitive stocks such as Asian Paints and BPCL.
Crude Prices Slump After OPEC+ Decision
Crude oil prices took a hit after OPEC+ announced plans to gradually reverse its voluntary production cuts. The oil-producing alliance revealed that it would restore 2.2 million barrels per day (mbpd) of supply over the next two years, accounting for 38% of the 5.9 mbpd cuts made since 2022.
As a result, Brent crude slumped 6.5% over the past four sessions, hitting its lowest level since December 2021, while WTI crude dropped 5.8%, marking its weakest point since May 2023.
The fall in crude prices provided a boost to sectors that are sensitive to oil prices. Lower crude prices translate to reduced input costs for these companies, boosting their profitability. Stocks like Asian Paints and BPCL surged by 3-5%, emerging as some of the top gainers on the Nifty.
Metal Stocks Surge, Dollar Index Declines
In addition to crude-sensitive stocks, metal stocks also saw strong buying action, benefitting from a decline in the US dollar index and positive sentiment surrounding China’s stimulus package. The US dollar index fell to a four-month low, which was favorable for emerging markets like India.
“If this trend continues, foreign institutional investor (FII) selling may subside, paving the way for further market gains,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Sensex and Nifty Close Higher
At the close of trading, the Sensex rose by 609.86 points, or 0.83%, to settle at 74,340.09, while the Nifty climbed 207.40 points, or 0.93%, to end at 22,544.70. Out of the 3,940 stocks traded, 2,857 advanced, 979 declined, and 104 remained unchanged.
Sectoral Performance
The Nifty Metal index saw the strongest sectoral performance, surging nearly 3%, followed by Nifty Energy and Nifty Oil and Gas, which both rose over 2%. Other notable sectoral gainers included Nifty FMCG, Nifty Media, and Nifty Pharma, which each gained between 1-2%.
Banking stocks also recovered from their initial losses, helping the Nifty Bank index rise by 0.3%. The recovery in financial stocks was supported by the Reserve Bank of India’s continued measures to inject liquidity into the banking system. The RBI had earlier announced open market purchases of government securities and USD/INR swaps worth Rs 1.9 lakh crore, alongside its decision on February 28 to conduct a $10 billion swap to boost long-term liquidity, which garnered strong demand.
Stock Highlights
Reliance Industries surged nearly 3%, leading the charge in the market. Other financial stocks such as Shriram Finance and Bajaj Finserv rose around 2% each. On the downside, Tech Mahindra was the major laggard, with a decline of over 2%.
The broader market also saw strength, with the BSE Smallcap index rising nearly 2%, and the BSE Midcap index gaining nearly 1%.
Global Markets and Tariff Delay
Global markets sent positive signals as well, with US President Donald Trump’s decision to delay tariffs on automakers by one month sparking hopes of further negotiations. However, market experts remained cautious, noting that the unpredictability of global trade dynamics could pose risks. Vijayakumar emphasized that while deals and settlements are possible, they won’t come easily, as Trump’s latest exemption for Canadian and Mexican auto imports suggested he was negotiating from a position of strength.
Technical Outlook
On the technical front, Anand James, Chief Market Strategist at Geojit Financial Services, pegged the next resistance for Nifty at 22,513, though he remains positive about the current market momentum that could push the index toward 23,000. “However, volatility must remain contained above 22,270 for the uptrend to sustain. A break below 22,190 could challenge the upside view,” he added.
Tags: Sensex, Nifty, Reliance Industries, crude oil, Asian Paints, BPCL, OPEC+, metal stocks, US dollar index, market recovery, RBI liquidity measures, stock market performance, financial stocks, market outlook, Geojit Financial Services
