The Indian stock market extended its winning streak for a third consecutive session on Thursday, buoyed by easing geopolitical tensions in the Middle East, fresh hopes of a US-Iran diplomatic breakthrough, and strong domestic institutional investor (DII) support.
The Nifty surged 304 points, or 1.21 percent, to end at a nine-month high of 25,549, while the Sensex jumped 1,003 points, or 1.21 percent, to close at 83,759 – levels last seen in October 2024. Both benchmark indices are now trading just 2.3 percent below their all-time highs recorded in September.
Broader markets also extended gains, with the Nifty Midcap 100 and Nifty Smallcap 100 indices rising more than 0.5 percent each.
Sectorally, the rally was led by metal stocks, as the Nifty Metal index climbed 2.3 percent, with all its constituents ending in the green. Oil and gas shares followed closely, with the Nifty Oil & Gas index gaining 1.86 percent, supported by a sharp decline in global crude prices that boosted sentiment for oil marketing companies.
Among individual performers, Brainbees Solutions soared 17 percent, while Apar Industries, Raymond Lifestyle, and Nuvama Wealth Management were among the 70-plus Nifty 500 stocks that posted gains between 2 and 5 percent.
Investor sentiment was lifted as Israel and Iran continued to observe a fragile ceasefire for a second straight day on Wednesday, easing fears of a broader regional conflict. US President Donald Trump confirmed that American and Iranian officials are expected to initiate diplomatic talks next week.
The 12-day-long conflict had sparked concerns across global financial markets before the truce, announced Tuesday, took effect. The confrontation began on June 13 when Israel launched airstrikes on Iranian military and nuclear installations under “Operation Rising Lion.” In retaliation, Iran’s IRGC launched “Operation True Promise 3,” targeting Israel’s energy infrastructure.
Adding to the market momentum, a weaker dollar also supported emerging market sentiment. The US Dollar Index fell to a three-year low of 97 after President Trump launched a scathing attack on Federal Reserve Chair Jerome Powell, calling him a “numbskull” and a “fool.”
Trump is said to be considering replacing Powell by September or October, potentially installing a “shadow chair” to steer monetary policy in a more dovish direction. The development has reignited concerns over the Fed’s independence and fuelled speculation of rate cuts.
While Powell maintained a cautious stance during his congressional testimony, softer-than-expected consumer confidence data has increased pressure on the Fed, especially ahead of key macroeconomic data releases due later this week – including Q1 GDP revisions, jobless claims, and PCE inflation figures.
Despite persistent foreign portfolio investor (FPI) outflows – with net sales totalling ₹5,670 crore so far in June – strong domestic institutional investor (DII) activity has kept the markets resilient. DIIs have invested nearly ₹70,000 crore this month, following net purchases of ₹66,194 crore in May. Mutual funds alone have infused over ₹36,000 crore in June.
Adding to the tailwinds, reports suggest India and the United States are close to finalising a mini trade deal under a broader Bilateral Trade Agreement (BTA). New Delhi is expected to push for an extension of the exemption window from Trump’s proposed reciprocal tariffs, set to take effect from July 9.
With positive cues on both global and domestic fronts, analysts believe Indian markets may continue to trend higher in the near term, although near-peak levels could prompt bouts of profit booking.
(By arrangement with livemint.com)