The Indian stock market continued its upward trajectory on March 6th, marking the second consecutive day of gains for both the Sensex and Nifty 50. After a cautious start with some early fluctuations, the market found its footing mid-session, fueled by strong buying in key sectors and individual stocks.
The S&P BSE Sensex closed the day with a significant gain of 609.86 points (0.83%), settling at 74,340.09. The NSE Nifty 50 also performed well, adding 207.40 points (0.93%) to reach 22,544.70. The positive momentum was widespread, with more stocks advancing than declining, indicating a healthy market breadth.
A major catalyst for the day's rally was the decline in crude oil prices. This followed the announcement by OPEC+ of plans to gradually ease its voluntary production cuts. The oil-producing alliance intends to restore 2.2 million barrels per day (mbpd) of supply over the next two years, representing a significant portion (38%) of the 5.9 mbpd cuts implemented since 2022. As a result, Brent crude prices fell by 6.5% over the past four sessions, reaching their lowest point since December 2021. WTI crude also experienced a drop of 5.8%, hitting its weakest level since May 2023.
This drop in crude prices had a positive impact on several sectors that rely heavily on oil as a raw material. Lower input costs typically translate to higher profit margins for these companies. Consequently, stocks like Asian Paints and BPCL saw substantial gains, surging between 3-5% and emerging as top performers on the Nifty.
Metal stocks also enjoyed a strong buying spree, driven by a weaker US dollar index and growing optimism surrounding potential stimulus measures in China. The US dollar index hit a four-month low, a development that generally benefits emerging markets like India.
The Nifty Metal index led the sectoral gains, climbing nearly 3%. The Nifty Energy and Nifty Oil and Gas indices followed closely, both rising over 2%. Other notable gainers included Nifty FMCG, Nifty Media, and Nifty Pharma, which added 1-2%.
Banking stocks, after an initial dip, also recovered, with the Nifty Bank index reversing course to close 0.3% higher. This recovery was attributed, in part, to the Reserve Bank of India's (RBI) ongoing efforts to inject liquidity into the banking system. The RBI announced open market purchases of government securities and USD/INR swaps totaling Rs 1.9 lakh crore, building on a previous $10 billion swap aimed at boosting long-term liquidity.
Among individual stocks, Reliance Industries saw a significant jump of nearly 3%, while financial stocks like Shriram Finance and Bajaj Finserv also gained around 2% each. Tech Mahindra, however, was a notable exception, declining by over 2%.
The broader market mirrored the positive sentiment, with the BSE Smallcap index surging nearly 2% and the BSE Midcap index rising almost 1%. Positive cues from global markets, including US President Donald Trump's decision to postpone tariffs on automakers, further contributed to the upbeat mood.
