Last-hour bull attack: Here's why Sensex soared a massive 900 points in 20 minutes today

Last-hour bull attack: Here's why Sensex soared a massive 900 points in 20 minutes

• Sensex surged 900 points on US-Iran nuclear deal news report
• Rally eased after clarification on Iran's nuclear statement
• Sensex closed 899.71 points higher at 80,015.90

Did our AI summary help?

Benchmark index Sensex posted a massive 900-point jump within 20 minutes on March 5 on a news report of likely resolution to US-Iran war but the rally fizzled out partially later.

Sky News Arabia reported Iranian Deputy Foreign Minister Majid Takht-Ravanchi as saying that Iran is ready to abandon its nuclear programme on condition that the United States presents a satisfactory alternative offer.

This news report triggered a massive rally in Sensex in no time during the last hour of trading and Wall Street Futures also were trading flat after erasing earlier losses.

At 2:35 pm on March 5, Sensex was trading at 79,369 and by 2:55 pm the benchmark index rose a whopping 900 points to trade at 80,259.

However, according to the state-run IRNA, this statement by deputy foreign minister is related to “earlier talks with the US" on their nuclear deal.

The clarification comes amid the raging West Asia conflict, which entered its sixth day.

IRNA clarified that the comments quoted by Sky News Arabia were related to earlier talks with the US, which launched ‘Operation Epic Fury’ with Israel after backchannel talks via mediator Oman over a nuclear deal with Iran failed. The joint attack also killed Supreme Leader Ayatollah Ali Khamenei on February 28.

Following the clarification, Sensex fell nearly 300 points from day's high. The Sensex closed 899.71 points or 1.14% higher at 80,015.90, and the Nifty ended 285.40 points or 1.17% higher at 24,765.90. About 2,644 shares advanced, 1,430 shares declined, and 128 shares were unchanged.

Indian shares rose on Thursday, snapping a three-session losing run, led by gains in Reliance and metal stocks while tracking a recovery in global risk appetite after a heavy selloff triggered by the Middle East crisis.

The benchmarks had fallen about 4% each since Friday, with the decline this week triggered by the US-Israel assault on Iran, which sent oil prices higher and kindled inflation concerns.

Nifty heavyweight Reliance Industries rose 3.3%.

"Today's market uptick is a temporary bounce, driven largely by Reliance rebounding from its sharp recent slide. As an index heavyweight, its snapback did most of the heavy lifting for the benchmarks," Anita Gandhi, head of institutional business at Arihant Capital Markets told Reuters.

"(Today's rise) is more due to attractive valuations after the recent selloff and on easing fears of any immediate squeeze on crude supply after the U.S. President's comments that crude flows will be protected," Gandhi said, adding that uncertainty in the markets is likely to persist due to the conflict.

Among individual stocks, Hindalco Industries and National Aluminium jumped 3.6% and 6%, leading the metal index 2.3% higher, on rising aluminium prices due to supply concerns. This was after Aluminium Bahrain halted shipments as the Strait of Hormuz faced a near-total shipping freeze.

An analyst said the markets remain "sell on rise" till Nifty decisively crosses 25,000.

"The index recovered sharply on Thursday amid growing possibility of de-escalation. The decline in crude oil prices also provided an immediate cushion to Indian investors.

"However, the overall chart structure has not changed materially, as the index continues to trade well below the 200 DMA as well as the former trendline support, which now acts as resistance. On the RSI, an initial sign of positive divergence is visible; however, it is not yet confirmed, keeping momentum uncertainties intact.

"On the downside, support is placed at 24,530/24,300. On the upside, resistance is seen at 24,850/25,000. The “sell on rise” approach remains valid until the Nifty decisively moves above 25,000," said Rupak De, Senior Technical Analyst at LKP Securities.