The benchmark equity indices bounced back on Tuesday on hopes of a possible de-escalation in the Middle East conflict after US President Donald Trump claimed a ceasefire agreement has been reached between Israel and Iran. The announcement led to a sharp fall in oil prices, easing concerns over geopolitical tensions.
The Sensex rallied 1,013.19 points or 1.24 percent to 82,909.98, while the broader Nifty climbed 300.75 points or 1.2 percent to 25,272.65.
Adani Ports and Special Economic Zone, Jio Financial Services, Shriram Finance, UltraTech Cement and Adani Enterprises were among the major gainer, climbing up to 5 percent.
Among key factors that supported the rally were:
1) Israel-Iran Ceasefire: Trump, writing on his social media platform Truth Social, said a ceasefire between Israel and Iran would begin in 12 hours, signalling an end to the 12-day conflict that had roiled global markets. The development brought relief to investors worried about supply disruptions and inflationary risks.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, "The dramatic developments in West Asia culminating in President Trump’s announcement of ceasefire indicate that the worst of the conflict is over."
2) Decline in Crude Oil Prices: Oil prices dropped sharply following Trump’s announcement. Brent crude futures fell $5.53 or 7.2 percent to $71.48 per barrel, while US WTI crude declined by the same margin to $68.51. Lower crude prices are positive for India, which imports more than 80 percent of its oil needs.
"Markets appear to be shifting towards a bullish bias, supported by a drop in WTI oil futures to $66.50, hinting at potential de-escalation in Middle East tensions," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said, in his pre-opening market commentary.
3) S&P Raises India’s GDP Forecast: S&P Global Ratings on Tuesday revised India’s FY26 GDP growth forecast to 6.5 percent, citing expectations of a normal monsoon, easing oil prices, and a possible shift in monetary policy. The upward revision provided a further boost to investor confidence amid signs of economic resilience.
4) Positive global cues: In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng were trading sharply higher. US markets ended in the positive territory on Monday. Wall Street Futures were also trading higher at around 10 AM IST.
5) Rupee rises: The rupee rose sharply by 65 paise to 86.13 against the US dollar in early trade on Tuesday as crude oil prices fell following hopes of a ceasefire between Iran and Israel. A weak greenback and a strong opening in the domestic equity markets further boosted the rupee.
6) Fed’s Bowman Hints at July Rate Cut: US Federal Reserve Governor Michelle Bowman said she could support a rate cut in July if inflation continues to ease, echoing similar remarks by Fed Governor Christopher Waller last week, according to Bloomberg. Expectations of a rate cut in the US tend to support emerging market flows, including into Indian equities, as lower US yields make risk assets more attractive.
Technical View
Anand James, Chief Market Strategist at Geojit Financial Services, said, “Despite the volatility and the pullback towards close, the inside bar formation yesterday leaves us with hope that the ongoing upside trajectory may persist.”
He added that while momentum remains weak, the Nifty could head towards the 25,200–25,460 range, with immediate support seen around 24,940.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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