Sensex jumps 850 points, Nifty near 24,000; Strong rise in the market due to 5% fall in crude oil

The Indian stock market made a strong start on the first trading day of the week. Investor sentiment strengthened amid a sharp fall in global crude oil prices and the possibility of reopening of the Strait of Hormuz, leading to a strong rise in both the Sensex and Nifty. In early trading on Monday (May 25) morning, BSE Sensex jumped by more than 850 points to reach the level of 76,275. At the same time, NSE’s Nifty was seen trading at the level of 23,973.15, increasing by more than 250 points. Nifty once again came very close to the important level of 24,000.

The biggest reason for the rise in the market was the nearly 5 percent decline in crude oil prices. According to reports, an agreement has been reached between America and Iran to reopen the Strait of Hormuz. However, the final details of the agreement are still under negotiation and the US naval blockade has not been completely lifted.

US President Donald Trump said, “An agreement has largely been finalized that remains to be finalized. It includes the United States, the Islamic Republic of Iran, and other relevant countries.”

The Strait of Hormuz is considered a very important sea route for global oil supply. The possibility of its opening reduced concerns about oil supply and a sharp fall in crude oil prices was recorded in the international market.

West Texas Intermediate (WTI) crude futures fell nearly 5 percent to $91.65 a barrel. At the same time, the prices of Brent crude were also seen falling by almost 5 percent and trading at $ 98.30 per barrel. On Comex, crude oil fell 4.93 percent to $ 91.84 per barrel.

Shares of Oil Marketing Companies (OMCs) benefited the most from the fall in oil prices. A rise of up to 5 percent was seen in the shares of these companies in the market. Investors hope that cheap crude oil will improve the margins of these companies.

A positive environment was also seen in Asian markets. Japan’s Nikkei 225 hit a record high, surpassing the 65,000 level for the first time. On Monday, this index reached 65,081.96 with a rise of 2.75 percent. A rise of 0.65 percent was also recorded in the Topix index. Markets in Hong Kong and South Korea remained closed for public holidays.

US stock markets will be closed on Monday due to Memorial Day. However, American markets closed with strong gains in Friday’s trading session. The Dow Jones closed up 294 points at 50,579.70, while the S&P 500 and Nasdaq Composite also gained.

Earlier on Friday, Indian markets also closed in the green. The NSE Nifty 50 index closed at 23,719, up 65 points, while the BSE Sensex closed at 75,415, up 232 points.

Experts believe that if crude oil prices remain soft and global geopolitical tensions reduce, Indian markets may see further strength in the coming days.

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