The initial euphoria over the US-Iran peace agreement is beginning to fade as investors reassess the broader economic outlook. While crude oil prices have retreated from recent highs, markets are increasingly concerned that oil may take months to return to pre-conflict levels. Investors are also awaiting the US Federal Reserve's policy decision and guidance on future interest rates.
Crude oil prices continue to decline, but not fast enough to eliminate inflation concerns.
Investors are closely watching the US Federal Reserve's policy meeting on June 17.
India's wholesale inflation accelerated to 9.68 percent.
A sharp rainfall deficit in the southwest monsoon is raising concerns about agricultural output and food inflation.
Asian markets traded lower on Tuesday morning despite Wall Street's strong rally.
Gift Nifty closed at 23,930 on Monday night and slipped to around 23,865 in early trade before recovering. The trend indicates a mildly positive opening for Indian equities.
India's merchandise exports rose 18 percent in May to a record $45.2 billion.
Key trade data:
Merchandise imports increased 22.1 percent to $73.4 billion.
Merchandise trade deficit widened 25 percent to $28.2 billion.
Services exports grew 13.2 percent to $36.8 billion.
Services imports rose 14.1 percent to $19.1 billion.
Combined goods and services trade deficit stood at about $10.5 billion.
The India Meteorological Department reported that southwest monsoon rainfall has been 32 percent below normal over the past two weeks.
Key concerns:
Rainfall has been deficient across most regions except northwest India.
The emergence of El Niño conditions could further weaken the monsoon.
Lower agricultural production may push food prices higher in the coming months.
The rainfall shortfall appears worse than earlier forecasts.
US equities surged on Monday after the Iran agreement eased geopolitical concerns.
--Dow Jones gained 468.77 points (0.92 percent) to close at a record 51,671.03.
--S&P 500 climbed 122.83 points (1.65 percent) to 7,554.29.
--Nasdaq Composite jumped 795.10 points (3.07 percent) to 26,683.94.
Following its record-breaking IPO, SpaceX gained another 20 percent on Monday after soaring 19 percent on its first trading day. Analysts expect strong momentum to continue until the stock enters major indices.
After Monday's rally, US futures were marginally lower:
Dow futures: -0.04 percent
S&P 500 futures: -0.13 percent
Nasdaq futures: -0.25 percent
Most Asian markets opened in negative territory.
Japan's Nikkei fell 0.25 percent.
Australia's benchmark index declined 0.40 percent.
Hong Kong slipped 0.10 percent.
Shanghai eased 0.20 percent.
South Korea's Kospi surrendered early gains.
Indian equities opened sharply higher on Monday on optimism over falling crude prices and the Iran peace agreement, but surrendered a significant portion of intraday gains.
Strong performers included:
Realty
Consumer durables
Capital markets
Tourism
Automobiles
Metals
Oil and gas
Pharmaceuticals, healthcare and media stocks under-performed.
Foreign portfolio investors were net buyers worth ₹200.05 crore.
Domestic institutional investors purchased equities worth ₹3,189.26 crore.
Sensex: 76,264.33 (+0.97 percent)
Nifty 50: 23,853.90 (+0.98 percent)
Bank Nifty: 57,198.80 (+0.68 percent)
Nifty Midcap 100: 61,549.65 (+1.29 percent)
Nifty Smallcap 100: 18,400.00 (+1.11 percent)
Market breadth remained strong, with advancing stocks outnumbering decliners by more than two to one.
Federal Bank touched a record ₹320.70 before closing at ₹316.70, up 0.32 percent.
South Indian Bank hit a lifetime high of ₹48.55 and ended 0.94 percent higher at ₹47.10.
CSB Bank rose 1.82 percent to ₹373.
Dhanlaxmi Bank slipped 0.40 percent to ₹32.28.
Gold extended gains amid continuing geopolitical uncertainty.
Spot gold surged more than 2 percent to close at $4,310.50 an ounce after touching $4,370.
Kerala's 22-carat gold price jumped ₹1,800 per sovereign to ₹1,11,120.
Silver eased slightly to $69.92 an ounce.
Platinum stood at $1,758.
Palladium traded at $1,316.
Rhodium was at $7,625.
Kalyan Jewellers surged 11.09 percent to ₹383.
Muthoot Finance gained 3.91 percent.
Manappuram Finance advanced 4.19 percent.
Copper rose 0.82 percent to $13,714 per tonne.
Aluminium fell 5.01 percent to $3,370 amid expectations of increased Gulf exports.
Zinc, tin, nickel and lead posted gains.
Rubber prices hit fresh highs amid supply concerns.
RSS-1 rubber in Bangkok reached $323.30 per quintal.
RSS-3 rose to $319.75 per quintal.
Kerala RSS-4 touched a record ₹27,300 per quintal.
Cocoa rose 3.36 percent to $3,998 per tonne.
International urea prices fell 26 percent over the past month to $401 per tonne.
The Indian rupee continued to gain on expectations that lower crude prices will improve India's external balances.
The rupee strengthened by 40 paise to close at ₹94.71 per dollar.
Analysts believe the dollar could fall below ₹92 this month if favourable conditions persist.
Brent crude declined 4.8 percent on Monday to settle at $83.17 a barrel and edged up slightly to $83.48 in early Tuesday trade.
WTI crude traded around $81.11 a barrel.
Despite the decline, markets remain concerned that oil prices may take several months to return to pre-conflict levels.
Bitcoin moved above $66,300.
Ether traded above $1,790.
Solana remained above $74.
Sensex: 76,264.33 (+0.97%)
Nifty 50: 23,853.90 (+0.98%)
Bank Nifty: 57,198.80 (+0.68%)
Midcap 100: 61,549.65 (+1.29%)
Smallcap 100: 18,400.00 (+1.11%)
Dow Jones: 51,671.03 (+0.92%)
S&P 500: 7,554.29 (+1.65%)
Nasdaq: 26,683.94 (+3.07%)
Dollar: ₹94.71 (-₹0.40)
Gold (ounce): $4,310.50 (+$90.20)
Gold (sovereign): ₹1,11,120 (+₹1,800)
Brent crude: $83.17 (-$4.16)