 "Happy Markets Day: Sensex zooms 1,100 pts intraday on Iran-Israel ceasefire")
Risk-on sentiment powered Dalal Street ahead with benchmark indices soaring after US President Donald Trump announced a tentative ceasefire between Iran and Israel.
The BSE Sensex index rose 1,112 points or 1.36 per cent in the intraday trade to hit a high of 83,009.6 during the day. The NSE Nifty50 advanced 339 points, or 1.36 per cent, to 25,311. The indices rose to their highest level since October last year.
All sectors except Media gained on Tuesday, with Nifty PSU Banks and Metal leading the charge. Market breadth was in favour of bulls, with 2,876 stocks advancing on BSE, while 923 declined and 179 remained unchanged, as of 12:25 PM.
The broader market was also in the green, but slighty trailed behind the frontline stocks, as the Nifty Midcap 100 and the smallcap 100 indices were up 1.11 per cent and 1.08 per cent, respectively.
India VIX, the measure of market volatility in the domestic market, fell as much as 5.27 to 13.3, the steepest jump since June 4 this year, according to Bloomberg data. Track LIVE Stock Market Updates Here
Key reasons behind the Sensex, Nifty fall today:
Iran-Israel tensions ease: Hours after Iran launched missiles at the US air base in Qatar -- which were all intercepted -- Trump said Iran and Israel agreed to a “complete and total ceasefire.” Iran's retaliation at American military bases comes a day after the United States carried out airstrikes on three of Iran’s nuclear sites.
However, in response to Trump's ceasefire claims, Iranian Foreign Minister Abbas Araghchi said that while there is no ceasefire agreement, Iran had no intention to keep responding to Israeli attacks after 4:00 AM Tehran time.
The dramatic developments in West Asia culminating in President Trump’s announcement of a ceasefire indicate that the worst of the conflict is over, according to VK Vijayakumar, Chief Investment Strategist, Geojit Investments. "The sharp reactions in the crude oil and stock markets suggest the geopolitical situation is limping back to normalcy."
Crude oil slides, Rupee strengthens: Crude oil extended its decline after Monday’s 7 per cent fall, with Brent down 2.48 per cent at $69.71 per barrel as of 9:05 AM IST. The drop in crude prices is expected to benefit oil marketing companies, particularly downstream firms.
Meanwhile, the rupee strengthened sharply, rising 64 paise to open at 86.11 against the dollar, compared to Monday’s close of 86.75, according to Bloomberg. This marks the steepest opening gain since May 13, although the rupee is still down 0.61 per cent so far this month. A stronger rupee improves returns for foreign investors in dollar terms, potentially boosting demand for Indian equities.
India-US trade deal: Sentiment on the street was also buoyed by reports that said India and the US are likely to close the trade deal before the July 9 deadline. Trade officials from both countries are racing to conclude an interim agreement before the reciprocal tariffs come into effect, Bloomberg reported, quoting people aware of the development.
Road ahead for Nifty: The Nifty, which has been stuck in the 24500-25000 range, will now decisively break out on the upside. But whether it will sustain at higher levels will depend on developments on the trade front, VK Vijayakumar said. "Since the pause on the reciprocal tariff ends on July 9, bilateral trade agreements have to happen before that. Therefore, markets are likely to respond to developments on the trade front."