Military actions launched in the Middle East on Monday have come to an end, reviving hopes of a possible US-Iran agreement. Iran's representative to the United Nations indicated that a deal could be reached by the end of this month. While the development has improved sentiment, markets remain cautious rather than enthusiastic.
Asian markets were trading with modest gains on Tuesday morning. US futures recovered from early losses, while crude oil fell below $94 a barrel.
Gift Nifty, which closed at 23,173 on Monday night, slipped to 23,084 before recovering to 23,145 on Tuesday morning, indicating a slightly weaker opening for the Nifty.
Chip stocks staged a strong recovery after Iran and Israel halted their latest round of hostilities. The S&P 500 and Nasdaq Composite ended higher, while the Dow Jones Industrial Average closed marginally lower.
The iShares Semiconductor ETF, which had plunged 10 percent on Friday, rebounded six percent on Monday. Micron Technology, which had fallen 13 percent on Friday, surged 10 percent.
The Dow Jones fell 80.77 points, or 0.16 percent, to close at 50,786.01. The S&P 500 gained 21.99 points, or 0.30 percent, to end at 7,405.73, while the Nasdaq Composite advanced 220.23 points, or 0.86 percent, to 25,929.66.
US index futures opened lower but later moved into positive territory. Dow futures were down 0.08 percent, while S&P 500 and Nasdaq futures rose 0.08 percent and 0.15 percent respectively.
Among Indian ADRs traded in New York, HDFC Bank recovered in after-hours trading to close 0.19 percent higher at $23.05. ICICI Bank gained 0.66 percent to $25.87, while Infosys rose 2.20 percent to $12.55. Wipro slipped 0.92 percent in after-hours trade to $2.16.
European markets followed Asia lower on Monday, although major UK indices managed to close in positive territory.
Asian markets remained volatile. Japan's Nikkei gained 0.75 percent, while Australia's benchmark index fell 1.20 percent. South Korea's Kospi surged four percent, led by semiconductor stocks. Samsung Electronics rose four percent and SK Hynix gained seven percent. Hong Kong and Shanghai markets opened with modest losses.
Renewed tensions in the Middle East weighed heavily on Indian equities on Monday. Brent crude had surged to nearly $98 a barrel during market hours, adding to investor concerns.
IT, metals, realty, oil and gas, automobiles, financials, media and consumer durables were among the worst-performing sectors.
The Sensex fell 719.08 points, or 0.97 percent, to close at 73,524.26. The Nifty 50 lost 243.70 points, or 1.04 percent, ending at 23,123. Bank Nifty declined 432.50 points, or 0.79 percent, to 54,063.75.
The Nifty Midcap 100 index dropped 1.40 percent to 59,905.65, while the Nifty Smallcap 100 index fell 1.92 percent to 17,763.45.
More than 70 percent of listed stocks ended lower. On the BSE, 1,181 stocks advanced while 3,192 declined. On the NSE, 751 stocks gained and 2,528 fell.
Rajesh Exports hit the lower circuit for a third consecutive session amid controversy over alleged accounting irregularities.
Sharp declines in gold prices weighed on gold loan companies and jewellery stocks. Muthoot Finance fell 6.35 percent, IIFL Finance five percent and Manappuram Finance 3.5 percent. Sky Gold, Kalyan Jewellers, PC Jeweller, PN Gadgil, Senco Gold and Titan also ended lower.
Wipro shares declined 8.45 percent after the record date for its share buyback. The stock has fallen 13 percent over the past three sessions, reflecting adjustments linked to the ₹15,000 crore buyback programme.
Foreign institutional investors remained net sellers, offloading shares worth ₹5,555.67 crore in the cash market on Monday. Domestic institutional investors provided support with net purchases of ₹5,165.24 crore. Total net foreign outflows from Indian equities in 2026 have now exceeded ₹2.72 lakh-crore.
Expectations of higher US interest rates and concerns over Middle East tensions initially pushed gold lower. The metal dropped to as low as $4,269 an ounce before recovering.
Gold closed at $4,331.30 an ounce, up $1.30. On Tuesday morning it slipped to $4,314 before rebounding to $4,338.
Technical analysts note that gold has fallen below its 200-day moving average and may need to test the $4,000 level before a sustained recovery can occur.
In Kerala, the price of 22-carat gold fell ₹760 per sovereign to ₹1,11,240.
Silver rose to $68.20 an ounce. Platinum stood at $1,745, palladium at $1,192 and rhodium at $7,425.
Industrial metals remained under pressure. Copper fell 0.51 percent to $13,660.65 a tonne, while aluminium dropped 1.42 percent to $3,597.65. Zinc, nickel, lead and tin also declined.
International rubber prices weakened amid concerns over Middle East developments. However, a weaker rupee supported domestic prices.
In Bangkok, RSS-3 rubber traded at $311.90 per quintal and RSS-1 at $315.40. In Kerala, RSS-4 rose to ₹26,700 per quintal.
Cocoa prices rose 1.46 percent to $3,816.94 a tonne. Concerns that El Niño weather conditions could affect production continued to support prices, although demand remains subdued.
The US Dollar Index remained above the 100 mark. After closing at 100.05 on Monday, it was trading at 100.01 on Tuesday morning.
The euro strengthened to $1.1531 and the pound to $1.3335. The Japanese yen traded at 160.24 per dollar amid speculation of possible intervention by Japanese authorities. The Chinese yuan weakened to 6.78 per dollar.
The yield on the US 10-year Treasury note rose to 4.574 percent.
Despite RBI measures aimed at improving dollar liquidity, the rupee fell 76 paise on Monday to close at 95.71 against the dollar. Rising crude oil prices and expectations of higher US interest rates remained key concerns.
In the non-deliverable forward market, the dollar eased to ₹95.48 on Tuesday morning. The yuan was quoted at ₹14.11 and the euro at ₹110.37.
Crude oil prices eased after tensions in the Middle East showed signs of moderation. Brent crude settled at $94.25 a barrel. Prices briefly rose on reports that Russia may reduce oil exports, but later slipped to around $93.80. WTI crude traded near $90.84.
Cryptocurrency markets remained volatile. Bitcoin fell below $61,200 before recovering to around $62,600 on Tuesday morning. Ether gained eight percent to around $1,660, while Solana rose seven percent to above $65.50.
Sensex: 73,524.26 (-0.97%)
Nifty 50: 23,123.00 (-1.04%)
Bank Nifty: 54,063.75 (-0.79%)
Midcap 100: 59,905.65 (-1.40%)
Smallcap 100: 17,763.45 (-1.92%)
Dow Jones: 50,786.01 (-0.16%)
S&P 500: 7,405.73 (+0.30%)
Nasdaq: 25,929.66 (+0.86%)
Dollar: ₹95.71 (+₹0.76)
Gold (ounce): $4,331.30 (+$1.30)
Gold (sovereign): ₹1,11,240 (-₹760)
Brent crude: $94.25 (+$1.16)