Iran deal takes Sensex nearly 400 points higher, bank stocks gain most

Indian equity markets surged in trade today on hopes that lower crude prices after the Iran deal may ease inflation and India’s current account deficit.

While the Sensex ended 375 points higher at 20593, Nifty ended above 6100, up 110 points at 6115.

Thirty six the 40 banking stocks ended with gains of around 1-7 percent.

BSE capital goods index gained almost 4 percent, banking index gained 3.7 percent while the realty index rose 2.5 percent.

[caption id=“attachment_1219749” align=“alignleft” width=“380”]  AFP[/caption]

The rupee was also trading higher at 62.60/61 versus its previous close of 62.87/88, as gains in the domestic share market keep hopes for foreign fund inflows alive.

More from Investing

MSMEs are breaking the traditional convention. Look who’s funding them Scale-up your startup without an investor! Here’s how

The crude oil prices slipped after the US and other countries signed a nuclear deal with Iran. The crude oil prices were down $1.35 per barrel to $93.56 and brent crude oil prices were down $1.94 at $108.90 per dollar. Falling oil prices could help contain inflation and narrow India’s current account deficit given the country imports crude for most of its needs.

As per the deal, Tehran will get over $4 billion from frozen accounts and restrictions on trade in gold, petrochemicals, car and plane parts will be suspended. In return, Iran will restrict its nuclear activities.

Praveen Kumar, FACTS Global Energy expects the Brent prices to slip down to USD 105 a barrel for the remaining 2013.

In an interview with CNBC-TV18, Kumar said the Iran deal is a good thing for Indian refiners because this means the pressure can come off a bit and they can start looking at some of these insurance type issues, but in terms of real price the market continues to stay strong.