A fragile ceasefire in the Middle East held for a second straight day, but global markets remained cautious amid lingering uncertainty over trilateral negotiations involving the US, Iran, and Israel. Investor sentiment also took a hit from unresolved tariff disputes. US President Donald Trump has warned nations other than the UK that he will unilaterally impose tariffs by July 9 if no agreement is reached—at rates considered unsustainable by many.
Asian markets opened higher on Wednesday but later trimmed gains. US stock futures also turned negative. In the derivatives segment, Gift Nifty had closed at 25,159 on Tuesday night before briefly climbing to 25,171 in early trade, suggesting a positive start.
European markets closed sharply higher on Wednesday, with key indices gaining over 1.5 percent, buoyed by the Middle East ceasefire and a rally in European currencies.
US markets surged on Tuesday. A retreat in oil prices post-ceasefire boosted airline and tech stocks. Advanced Micro Devices rose 6.83 percent, Broadcom gained 4 percent, and Nvidia advanced 2.6 percent.
Federal Reserve chair Jerome Powell, testifying before a US House committee, stated that a July rate cut is unlikely. He emphasised the Fed is awaiting clarity on tariff issues before adjusting policy.
The Dow Jones Industrial Average jumped 507.24 points (1.19 percent) to close at 43,089.02. The S&P 500 rose 67.01 points (1.11 percent) to 6,092.18, and the Nasdaq gained 281.56 points (1.43 percent) to 19,912.53.
However, US futures were marginally lower Thursday morning, with the Dow, S&P, and Nasdaq down 0.02 percent, 0.03 percent, and 0.02 percent respectively.
Early Wednesday saw a mixed trend in Asian markets. While Hong Kong rose, mainland Chinese indices were slightly lower.
The Indian market surged at the open on Wednesday, encouraged by the Middle East ceasefire announcement, but later pared gains as Israel and Iran exchanged ceasefire violation accusations. Benchmark indices closed with modest gains, though mid and small cap indices outperformed.
The Nifty rose 172.45 points (0.29 percent) to close at 25,044.35. The Sensex gained 158.32 points (0.19 percent) to end at 82,055.11. Bank Nifty jumped 402.35 points (0.72 percent) to 56,461.90. The Nifty Midcap 100 climbed 415.60 points (0.71 percent) to 58,622.40, while the Smallcap 100 added 131.85 points (0.72 percent) to close at 18,452.75.
Market breadth was positive: on the BSE, 2,615 stocks advanced and 1,385 declined; on the NSE, 1,963 stocks rose and 917 fell.
At the NSE, 44 stocks hit 52-week highs, while 31 touched their lows. As many as 111 stocks hit the upper circuit and 53 were locked in the lower circuit.
Foreign institutional investors (FIIs) were net sellers in the cash segment on Tuesday, offloading shares worth ₹5,266.01 crore. Domestic institutional investors (DIIs) bought equities worth ₹5,209.60 crore.
The ceasefire and lower crude prices have supported equity sentiment. S&P Global Ratings revised India's GDP growth forecast for the current year to 6.5 percent, up 0.2 percent from its previous estimate, citing softer inflation due to falling oil prices.
Concerns persist that a wave of IPOs—including the ₹12,500-crore HDB Financial Services issue—could absorb liquidity and cap market gains. Analysts expect the Nifty to consolidate between 24,800 and 25,300. Though the Nifty briefly crossed 25,300 on Wednesday, it failed to sustain above that level.
A strong move past 25,300 could revive bullish momentum. On Wednesday, the index is seen finding support at 25,005 and 24,805, with resistance around 25,245 and 25,315.
Gold remained volatile on Wednesday. Amid ceasefire-related uncertainty, prices swung between $3,371 and $3,293 per ounce before settling at $3,322.90. On Thursday morning, gold rose slightly to $3,329. In Kerala, gold fell ₹1,080 per sovereign on Tuesday to ₹72,760. Silver fell to $35.85 per ounce.
Rubber fell 0.93 percent in international trade to 169.60 cents/kg. Cocoa soared 7.30 percent to $9,179.22/tonne, coffee rose 3.33 percent, while tea remained unchanged. Palm oil rose 0.13 percent.
The ceasefire in the Middle East pushed the US dollar lower again. The dollar index closed at 97.86 on Tuesday and was trading at 97.88 Thursday morning. The euro stood at $1.1617, while the pound rose to $1.3612. The Japanese yen strengthened to 144.97 per dollar. US 10-year bond prices rose, pulling yields down to 4.302 percent.
The Indian rupee appreciated significantly on Tuesday, gaining 78 paise to close at 85.97 per dollar—its best single-day gain in a month. In intraday trade, the rupee touched 85.91. China’s yuan traded at 7.17 per dollar.
Crude prices rebounded after a sharp decline. Brent crude, which had dropped below $67, rose 1.4 percent to $68.08 per barrel on Wednesdady morning. WTI was at $65.32, while Murban crude traded at $67.84. Natural gas rose 0.82 percent.
Cryptocurrencies rallied again. Bitcoin gained 3.5 percent to $106,500, while Ether traded above $2,460. Several other altcoins rose more than 5 percent.