The Indian stock market extended gains on Wednesday, with Sensex and Nifty trading in the green as oil prices slipped on fresh hopes that the Strait of Hormuz could reopen soon after Iran said it has resumed talks with Oman on managing the strategic waterway.

Sensex gained 321 points to 77,970 while Nifty 50 rose around 42 points to 24,377 on Wednesday. Broader markets also opened in the green, with Nifty Smallcap 100 and Nifty Midcap 100 indices rising to 0.45%.

Eternal shares jumped nearly 2% to lead gains on Sensex, while ICICI Bank and SBI shares were up around 1% each. Bucking the trend, Tata Steel, Infosys and Bharti Airtel shares dropped around 1% each.

Among the sectors, Nifty PSU Bank index gained over 1%, while Nifty Metal, Nifty IT and Nifty Auto slipped into the red. The overall market breadth remained positive, with NSE seeing 1,931 advances and 566 declines, while 120 stocks remained unchanged.

What lies ahead for Dalal Street?

There are two factors that are positive for the market today, according to V K Vijayakumar, Chief Investment Strategist at Geojit Investments. First, is the news of another ceasefire between the US and Iran, and initiatives for resuming shipping through the Strait of Hormuz have brought down the Brent crude rate to $86.3. Since a rally in the Indian market has been mainly constrained by the elevated crude prices, this sharp dip in crude is a positive. Second, the dip in bond yields in the US (10-year at 4.64%) is a mild positive for equity markets globally.

“But these are not good enough to trigger a sharp rally in the Nifty since many mega caps in the Nifty are technically weak. The market rally will be led by the broader market, which is driven by supporting fundamentals and momentum. It is also important to note that valuations in the broader market are getting stretched,” according to the analyst.

Nifty’s rise, which was expected yesterday with an initial objective of 24,400, is expected to mature today, said Anand James, Chief Market Strategist at Geojit Investments.

“We are also open to the possibilities of extending this run towards 24,550 or even 24,820. Downside marker may be placed in the 24,220 vicinity,” the analyst further said.