Prospects for an agreement over the Strait of Hormuz continue to brighten and fade.
Iran has demanded that naval blockades and economic sanctions be lifted and that it be allowed to collect tolls before the Strait of Hormuz is reopened. These conditions have increased uncertainty over a possible agreement.
Crude oil prices fell below $80 a barrel before recovering slightly.
The Indian market is focused on the Reserve Bank of India’s monetary policy decision, which Governor Sanjay Malhotra will announce at 10 am today.
In derivatives trading at GIFT City, GIFT Nifty closed at 24,771.00 on Tuesday night. It fell to 24,697 this morning before recovering to 24,720. This indicates that the Indian market could open with strong gains.
Markets expect the Reserve Bank of India to leave interest rates unchanged in its monetary policy review.
The repo rate stands at 5.25%, the reverse repo rate at 3.35%, the bank rate at 5.50%, the marginal standing facility rate at 5.50% and the standing deposit facility rate at 5%.
The cash reserve ratio is 3%, while the statutory liquidity ratio is 18%.
The repo rate is the interest charged on overnight loans taken by banks from the Reserve Bank of India during emergencies. The reverse repo rate is the interest paid when banks park surplus funds with the central bank.
The cash reserve ratio is the share of deposits that banks must retain as cash. The statutory liquidity ratio is the share they must invest in approved securities.
The India Meteorological Department said the deficit in southwest monsoon rainfall stood at 11.8% as of August 4.
Under the department’s classification, rainfall that is up to 19% above or below the long-period average is considered normal.
Kerala’s rainfall deficit narrowed to 22.93%.
Uttar Pradesh, Bihar, Punjab, Haryana, Jharkhand, Karnataka, Andhra Pradesh, Kerala, Assam and Meghalaya have recorded rainfall deficits of more than 20%.
Around 40% of India’s geographical area has received rainfall that is more than 20% below normal.
However, the government estimates that the area under kharif cultivation is now close to last year’s level.
US markets continued their enthusiastic rally, climbing to record highs as though no major threat were in sight.
The Dow Jones Industrial Average and the S&P 500 set records on Tuesday. Statements suggesting that an agreement over the Strait of Hormuz was possible pushed oil prices lower again.
Strong results from major companies also supported the market, while labour-market data contained no adverse surprises.
SpaceX reported strong second-quarter results after the market closed. Revenue surged 92%, while its loss narrowed from $4.3 billion in the first quarter to $541 million.
The stock nevertheless fell 6.8% in after-hours trading after gaining 9.43% during the regular session. Investors remain concerned about the company’s heavy spending on artificial intelligence and other areas.
Software company Palantir surprised the market with its second-quarter results, sending the stock up 29.45%.
Advanced Micro Devices fell 8% following disappointing results.
The Dow jumped 907.47 points, or 1.71%, to close at a record 54,085.88 on Tuesday.
The S&P 500 advanced 136.02 points, or 1.79%, to end at 7,736.52. The Nasdaq Composite surged 671.10 points, or 2.59%, to close at 26,584.99.
US futures are showing a mixed trend.
Dow futures are up 106 points, or 0.20%, while S&P 500 futures have gained 16 points, or 0.21%.
Nasdaq futures are down 26 points, or 0.09%.
In the American Depositary Receipt market in New York, HDFC Bank declined 0.87% during regular trading on Tuesday before gaining 0.38% in after-hours trade to close at $23.98.
ICICI Bank rose 0.23% during the regular session and fell 0.33% in after-hours trading to close at $30.23.
Infosys gained 2.86% during regular trading before declining 0.87% in after-hours trade to close at $12.49.
Wipro remained unchanged during the regular session and gained 0.07% in after-hours trading to close at $2.0515.
European markets rose again on Tuesday, supported by lower oil prices and hopes of an agreement over the Strait of Hormuz.
Technology stocks led the gains.
Lufthansa shares fell 8.2% after the airline warned that higher fuel prices would reduce profits.
Asian markets are trading higher today.
South Korea’s Kospi gained 3.5%, while Japan’s Nikkei rose 3%.
SoftBank shares surged 10%. Samsung Electronics and SK Hynix also advanced.
Australia’s benchmark index gained 0.20%. Hong Kong declined 0.20%, while Shanghai rose 0.25%.
Problems surrounding the National Stock Exchange’s new Closing Auction Session price-determination system are continuing.
The gap between the movements of the Nifty and the Sensex remained wide on Tuesday.
The large difference between prices on the National Stock Exchange and the Bombay Stock Exchange seen on the previous day narrowed during morning trading. However, the closing auction again produced a substantial divergence.
Foreign institutional investors and funds have welcomed the new system.
Indian mutual funds and retail investors, however, are concerned about large price movements during the final 15 minutes. These movements make it more difficult to hedge investments and reduce the risk of losses.
Fund managers also fear that large changes in the closing net asset value of mutual funds could unsettle investors. The new system may also cause substantial losses in options and other positions.
Exchange officials believe the problems will ease once more investors participate in the closing auction.
The Indian market fell on Tuesday despite gains across overseas markets. The new closing-price system was seen as the main factor behind the weakness.
The closing auction substantially narrowed the sharp losses recorded during cash-market trading. A strong rise had also occurred after the cash market closed on the previous day.
Despite a recovery during the final 15 minutes, stocks ended with significant losses.
The real estate index fell 2.39%. Information technology, fast-moving consumer goods, banking, financial services and consumer durables were among the other major declining sectors.
Foreign investors continued buying in large quantities on Tuesday, recording net purchases of ₹2,446.47 crore in the cash market.
Domestic institutional investors were net sellers of ₹936.14 crore.
The Sensex fell 210.08 points, or 0.27%, to close at 78,428.95 on Tuesday.
The Nifty declined 159.40 points, or 0.64%, to end at 24,614.90.
The Bank Nifty dropped 340.75 points, or 0.58%, to close at 57,907.20.
The Nifty Midcap 100 declined 187.70 points, or 0.29%, to 63,491.60. The Nifty Smallcap 100 gained 45.90 points, or 0.23%, to close at 19,635.25.
Advances and declines were nearly evenly matched in the broader market.
On the BSE, 2,047 stocks advanced and 2,199 declined. On the NSE, 1,586 stocks rose while 1,701 fell.
Retail investors can apply today for shares in the Life Insurance Corporation of India’s offer for sale. The offer received bids for 3.32 times the number of shares available on Tuesday.
FSN E-Commerce Ventures, the owner of Nykaa, tripled its net profit in the June quarter.
A heavy loss at subsidiary Hindustan Petroleum Corporation reduced Oil and Natural Gas Corporation’s first-quarter profit by 43%.
ONGC’s standalone net profit more than doubled to ₹17,034 crore. After including HPCL’s loss of ₹12,265 crore, consolidated net profit stood at ₹6,554 crore.
Marico reported a 23% increase in June-quarter revenue and a 25% rise in net profit.
Godrej Properties reported a 16% decline in first-quarter revenue and a 42% fall in net profit.
Bharti Airtel’s June-quarter revenue increased 18%, while net profit surged 37%.
Average revenue per user rose to ₹264, compared with ₹215.60 for Reliance Jio. Airtel added 10 lakh subscribers, taking its total subscriber base to 30 crore.
Prospects of a Strait of Hormuz agreement and falling crude oil prices lifted gold again on Tuesday.
Gold gained $22.10 to close at $4,076.60 an ounce. It rose to $4,080 this morning.
In Kerala, the price of 22-carat gold fell by ₹160 per sovereign to ₹1,05,600.
Silver closed at $59.65 an ounce.
Platinum stood at $1,724, palladium at $1,327 and rhodium at $8,050.
Copper touched a one-year high of $14,195 a tonne on Tuesday before easing marginally.
It closed 1.76% higher at $14,190 a tonne.
Aluminium gained 0.54% to close at $3,236.10. Zinc declined, while tin, nickel and lead advanced.
International rubber prices fell marginally, while prices remained unchanged in Kerala.
In Bangkok, RSS-1 was quoted at $283.30 per quintal and RSS-3 at $279.80 per quintal.
In Kerala, RSS-4 remained at ₹28,400 per quintal.
Cocoa prices gained 2.53% on Tuesday to reach $6,089 a tonne.
The increase followed Ghana’s warning that production would decline sharply during the 2026-27 season.
The Ghana Cocoa Board estimates that adverse weather could reduce production by 16%. Output in Ivory Coast is also expected to fall by more than 10%.
Ghana and Ivory Coast are the world’s largest cocoa-producing countries.
Arabica coffee rose 1.11% to $3.23 a pound.
The US Department of Agriculture expects global coffee production to reach a record level this year. Record arabica output is expected in Brazil, while Vietnam is projected to produce a record robusta crop.
There are concerns that El Niño could reduce production next year.
The US Dollar Index fell on Tuesday to close at 99.86. It rose to 99.89 this morning.
The euro climbed to $1.1529, while the pound rose to $1.3447.
The Japanese yen weakened to 157.62 against the dollar. The Bank of Japan and the US Federal Reserve are jointly trying to strengthen the yen.
The Chinese yuan remained at 6.75 against the dollar.
The yield on the US 10-year Treasury note declined to 4.623% this morning.
The Indian rupee weakened on Tuesday. The dollar rose by four paise to close at ₹95.37.
In the offshore non-deliverable forward market, the dollar was quoted at ₹95.10 this morning.
The Chinese yuan remained at ₹14.12, while the euro rose to ₹109.98.
Crude oil prices declined again before recovering.
Brent crude fell 5.2% on Tuesday to close at $79.36 a barrel. It declined further to $79.14 this morning.
West Texas Intermediate crude fell to $75.42 a barrel.
Cryptocurrencies continue to trade with volatility.
Bitcoin rose above $63,900 this morning. Ether remained above $1,860, while Solana traded above $73.25.
