The Indian stock market is set to gap up on Tuesday, led by a combination of positive global cues and de-escalating geopolitical tensions. The Gift Nifty, which is near the 25,175 level—about 181 points above the last Nifty futures close—is indicative of robust early momentum for local indices.
Here are 10 significant developments that could influence market sentiment today:
1. Market Outlook: Good Beginnings Expected
Following Monday's sharp selloff precipitated by geopolitical anxiety, Indian equities are poised to bounce back. Sensex and Nifty 50 indices are likely to open in the positive, boosted by optimism in the global market and a decline in crude oil expectations.
2. Sensex & Nifty Summary
On Monday, market players witnessed a widespread selloff following the rise in tensions in the Middle East.
- Sensex dropped by 511.38 points (0.62%) to close at 81,896.79
- Nifty 50 lost 140.50 points (0.56%) to settle at 24,971.90
3. Gift Nifty Signals Gap-Up Opening
The Gift Nifty, which is selling at a premium to Nifty futures, is indicating a bullish opening for Indian markets—indicating investor confidence as the day of trading unfolds.
4. Global Rally: Wall Street Ends Higher
U.S. markets rose overnight on expectations of a Federal Reserve rate cut as soon as July.
Dow Jones surged 374.96 points to settle at 42,581.78
S&P 500 rose 0.96% to 6,025.17
Nasdaq increased 0.94% to close at 19,630.98
Strong movers included:
Tesla (+8.2%)
Northern Trust (+8.0%)
Super Micro Computer fell sharply by -9.8%
5. Asian Markets Rally on Ceasefire News
Asian stocks rose in early trading after news of a ceasefire between Israel and Iran, which was announced by U.S. President Donald Trump.
Nikkei 225: +1.59%
Kospi: +2.09%
Topix: +1.32%
Kosdaq: +1.71%
Hang Seng also indicated a firmer opening.
6. Geopolitical Update: Israel-Iran Ceasefire
President Trump announced a "Complete and Total CEASEFIRE" between Israel and Iran, bringing an official close to what he termed the "12-Day War." The ceasefire will go into effect within 12 hours. Iran's Supreme Leader Ayatollah Ali Khamenei continued in defiant mood, particularly in light of Iran's recent missile attack on a U.S. base in Qatar.
7. Crude Oil Prices Fall Sharply
Oil prices sank to their lowest in more than a week amid the ceasefire.
Brent crude fell 3.78% to $68.78/barrel
WTI crude fell 3.88% to $65.85/barrel
The decline could take the pressure off inflation worries and benefit energy input-dependent sectors.
8. Gold Drops as Safe-Haven Demand Relaxes
As geopolitical tensions moderated, investor appetite for gold dwindled.
Spot gold fell 0.6% to $3,349.89/ounce
US gold futures lost 0.9% to $3,364.20/ounce
9. Dollar Drops; Euro and Sterling Rise
The U.S. dollar dipped after the ceasefire.
USD/JPY dipped 0.21% to 145.79
EUR/USD appreciated to $1.1602
GBP/USD rose to $1.3551
10. Expectations of a Fed Rate Cut Increase
The Fed's Vice Chair Michelle Bowman signaled a potential interest rate reduction in July on account of mounting risks to the U.S. labor market. Treasury yields acted quickly:
2-year yield fell to 3.851%
10-year yield decreased to 4.34%
Final Word:
In spite of the relief bounce in overseas markets, local investors must be careful. As Religare Broking's Ajit Mishra advises,
"Without the presence of significant domestic triggers, market direction would be reliant on global sentiment and crude price action. Selective, strength-based stock-picking is advised during this consolidation."
Stay tuned and stay informed.
Disclaimer: The following is for informational purposes only. Investors should seek the advice of certified financial advisors prior to making any investment choices.
