Fresh geopolitical tensions returned to the forefront after US President Donald Trump warned that if a nuclear agreement with Iran is not reached, the US could target Iranian bridges, power plants and oil refineries. The renewed threat lifted crude oil prices, weighed on Asian markets, strengthened the US dollar and pushed gold lower. US index futures traded mixed.
Despite the cautious global backdrop, Indian equities are expected to open on a positive note, supported by sustained foreign institutional investor (FII) buying and strong domestic liquidity.
Gift Nifty closed at 24,580 on Monday night and climbed to around 24,594 in early trade before easing slightly, indicating a positive opening for Indian equities.
India's southwest monsoon rainfall remained 20 percent below normal as of July 6, according to the India Meteorological Department (IMD). The deficit stood at 40 percent a week earlier, indicating an improvement, although rainfall is still below normal. The IMD expects July rainfall to reach around 94 percent of the long-term average.
The weak monsoon has delayed kharif sowing. As of July 5, the total sown area was 20.77 percent lower than a year ago.
Decline in sowing by crop:
Oilseeds: 39.3 percent
Pulses: 21.8 percent
Coarse cereals: 16.3 percent
Cotton: 23 percent
Rating agency S&P Global expects El Niño-related weather disruptions to reduce agricultural output, potentially pushing India's retail inflation to around 5.1 percent, weakening rural demand and putting pressure on government finances.
US equities ended higher after selling pressure in semiconductor stocks eased.
Dow Jones gained 155.84 points (0.29 percent) to close at a record 53,055.91.
S&P 500 rose 54.19 points (0.72 percent) to 7,537.43.
Nasdaq Composite advanced 288.49 points (1.12 percent) to 26,121.16.
Early Tuesday trading showed a mixed trend.
Dow futures rose 63 points.
S&P 500 futures slipped 10 points.
Nasdaq futures declined 200 points.
Indian banking ADRs remained volatile.
HDFC Bank surged 6.33 percent during regular trading before ending after-hours down 0.36 percent at $27.30.
ICICI Bank rose 2 percent during regular trading before slipping 0.44 percent after-hours to $29.95.
Infosys recovered 1.10 percent after-hours to $11.00 after falling 2.51 percent during regular trading.
Wipro gained 1.09 percent after-hours to $1.86 after declining 2.65 percent during market hours.
European markets ended mixed on Monday. The Stoxx Europe 600, French and UK indices closed lower, while Germany's benchmark index ended higher.
Asian markets traded mostly lower on Tuesday.
South Korea's Kospi fell about 5 percent.
Japan's Nikkei declined 1.5 percent.
Australia's benchmark slipped 0.10 percent.
Hong Kong's Hang Seng gained 0.40 percent.
Shanghai Composite lost 0.55 percent.
Renewed foreign buying lifted Indian equities for the fourth consecutive session. Foreign investors, who sold more than ₹64,000 crore worth of equities until mid-June, have turned buyers over the past three weeks. Net buying during June 16-30 stood at ₹14,109 crore, while they invested another ₹2,985 crore during the first four trading sessions of July.
The strongest inflows have gone into financials, consumer durables, construction, healthcare and consumer services, while telecom stocks have continued to witness selling.
On Monday, FIIs made net purchases worth ₹243.03 crore. Domestic institutional investors (DIIs) bought shares worth ₹3,791.42 crore.
Technology, media and public sector banks underperformed. Realty, consumer durables, automobiles, oil and gas, and metal stocks led the gains.
Among banking stocks, HDFC Bank rose 3.36 percent after its quarterly business update, IndusInd Bank gained 3.76 percent and Kotak Mahindra Bank fell 3.97 percent.
Defence and aerospace stocks remained active. Apollo Micro Systems dropped 6.23 percent after indicating that its board would consider fund raising, including a possible share sale. Zen Technologies gained 6.66 percent, Dynamatic Technologies rose 6.08 percent and Paras Defence added 4.86 percent.
On Monday, the Sensex gained 521.16 points (0.67 percent) to close at 78,285.07. The Nifty 50 rose 159.50 points (0.66 percent) to 24,430.35. Bank Nifty advanced 0.61 percent to 58,291.50. The Mid cap 100 index gained 0.45 percent to 62,471.50, while the Small cap 100 index rose 0.75 percent to 19,319.10.
Market breadth remained weak despite the benchmark gains. On the BSE, 1,985 stocks advanced while 2,366 declined. On the NSE, 1,570 stocks gained and 1,754 fell.
Cochin Shipyard: The Centre will sell a 5.04 percent stake through an Offer for Sale (OFS) at a floor price of ₹1,400 per share. The stock closed 1.02 percent lower at ₹1,508.50. The issue opens for institutional investors today and for retail investors tomorrow.
Trent: First-quarter revenue rose 19 percent.
Titan: Consumer business grew 41 percent in the June quarter.
Devyani International: Varun Beverages' Kenyan subsidiary will acquire Devyani Foods' Kenya business for ₹305 crore.
Jubilant FoodWorks: First-quarter revenue increased 14.1 percent.
Expectations that US interest rates may remain higher for longer continued to pressure gold prices. Investors now await the release of the Federal Reserve's meeting minutes on Wednesday.
Gold closed $10 lower at $4,166 an ounce on Monday before falling to around $4,128 in early Asian trade. In Kerala, 22-carat gold declined ₹80 to ₹1,07,520 per sovereign.
Silver eased from $62.17 to around $61.16 an ounce. Platinum traded at $1,617, palladium at $1,244 and rhodium at $7,700.
Most industrial metals advanced on Monday. Copper gained 0.07 percent to $13,307.35 per tonne, while aluminium rose 0.73 percent to $3,108.34 per tonne. Zinc, lead and tin also gained, while nickel declined.
Global rubber prices continued to strengthen. In Bangkok, RSS-1 rubber rose to $293.60 per quintal and RSS-3 to $290.20 per quintal. In Kerala, RSS-4 rubber climbed to ₹27,100 per quintal.
Cocoa prices jumped 13.49 percent to $5,694 per tonne, the highest level since January, amid concerns that El Niño could reduce production in West Africa.
Arabica coffee climbed 15.82 percent to $3.50 per pound as Brazilian production weakened and inventories fell to their lowest level since March 2024.
The US Dollar Index ended Monday at 100.86 and edged up to around 100.91 on Tuesday morning.
The euro traded at 1.1442 against the dollar, the pound at 1.3393, the Japanese yen at around 161.90 per dollar and the Chinese yuan at 6.80 per dollar.
The yield on the US 10-year Treasury rose to 4.481 percent.
The Indian rupee weakened by 19 paise on Monday to close at 95.40 against the US dollar as oil companies increased dollar purchases.
In the offshore NDF market, the dollar eased from 95.60 to around 95.39. The euro traded at ₹109.16 and the Chinese yuan at ₹14.04.
Crude oil prices rose after Trump's renewed warning to Iran. Brent crude, which closed Monday at $71.99 a barrel, climbed to around $72.19 in early trade, while WTI crude traded near $68.76.
Trump's renewed support for cryptocurrencies lifted digital assets. Bitcoin moved above $63,800, Ether traded above $1,790 and Solana crossed $82.
Sensex 78,285.07 +0.67%
Nifty 50 24,430.35 +0.66%
Bank Nifty 58,291.50 +0.61%
Mid cap 100 62,471.50 +0.45%
Small cap 100 19,319.10 +0.75%
Dow Jones 53,055.91 +0.29%
S&P 500 7,537.43 +0.72%
Nasdaq 26,121.16 +1.12%
US dollar ₹95.40 +₹0.19
Gold (ounce) $4,166.00 -$10.10
Gold (sovereign, Kerala) ₹1,07,520 -₹80
Brent crude $71.99 -$0.13