Indian equity benchmarks opened higher on Wednesday, with the BSE Sensex gaining more than 752 points as investors tracked the launch of Jio Platforms’ much-anticipated initial public offering (IPO) and prospects of a trade agreement between New Delhi and Washington. However, elevated crude oil prices remained a key concern, potentially limiting further gains.
The Sensex was trading at around 74,605.28 at approximately 9.34 am on Wednesday. GIFT Nifty futures stood at 23,017 at 7.57 am, indicating a positive opening for the Nifty 50, which had closed at 22,888.95 on Monday, according to figures cited in a Reuters report. Indian stock markets remained closed on Tuesday on account of Dussehra.
Jio Platforms IPO draws investor attention
The launch of Jio Platforms’ $3.2 billion IPO, equivalent to approximately ₹30,400 crore, was among the key developments drawing investors’ attention on Wednesday. The telecoms, cloud and artificial intelligence group had raised $853.3 million, or approximately ₹8,106.35 crore, from prominent anchor investors ahead of the public offering.
The anchor investors included the Abu Dhabi Investment Authority, BlackRock and Fidelity. The offering is set to become India’s largest-ever IPO, placing the company’s market debut at the centre of investor attention.
Shares of Bajaj Finance were also in focus after the non-banking financial company reported a 28.7% year-on-year increase in quarterly profit on Monday. The lender’s performance was supported by strong growth in its loan book.
India-US trade deal hopes support sentiment
Expectations of a trade agreement between India and the United States provided another source of support for the domestic equity market. US Secretary of State Marco Rubio told CNN-News18 on Tuesday that he expected Washington and New Delhi to reach a trade deal within weeks rather than months.
The prospect of an agreement has raised hopes of improved trade relations between the two countries, helping bolster investor sentiment as markets resumed trading after Tuesday’s holiday.
The gains followed a weak session on Monday, when both the Nifty 50 and the Sensex fell by more than 1% each. The decline came after private-sector lenders HDFC Bank and Axis Bank reported lower net interest margins over the weekend, raising concerns about their earnings outlook.
Rising crude oil prices remain a concern
Despite the positive opening, elevated oil prices continued to pose a risk to the market’s upward momentum. Brent crude futures rose by more than 1% to $110 a barrel as investors remained concerned about potential disruptions to shipping in the Red Sea and threats to oil infrastructure in Saudi Arabia.
Higher crude oil prices are a concern for India because the country imports a substantial share of its energy requirements. A sustained increase in oil prices can raise the import bill, put pressure on the fiscal deficit and increase costs for businesses, potentially weighing on corporate profitability.
With investors weighing optimism surrounding the Jio Platforms IPO and a possible India-US trade agreement against the impact of expensive oil, movements in crude prices and developments in the trade negotiations are likely to remain important factors influencing market sentiment.