Hopes of an early end to the conflict lifted global market sentiment after US President Donald Trump said late Monday that the war could end soon and that crude oil supplies would be ensured. The remarks came after US markets had closed but helped support sentiment globally. However, Iran’s Revolutionary Guard responded by saying it would decide when the war ends, not the US.
Crude oil prices fell sharply, and Asian markets surged in early Tuesday trade. Indian equities are also likely to open with strong gains.
The war has not ended, but there were no reports of missile, air or drone attacks early this morning, raising hopes of a pause in hostilities.
Trump also warned that the US could take control of the Strait of Hormuz if shipping through the vital route was disrupted. He cautioned that any attempt to block cargo movement there would invite retaliation “20 times stronger”.
In derivatives trading at GIFT City, Gift Nifty touched 24,359.50 late Monday and climbed to around 24,440 early Tuesday, indicating that the Nifty may open more than 1 percent higher.
US markets recovered from steep losses on Monday and closed higher. The rebound followed signals from Trump that the war might end soon and after crude oil prices slipped below $100 a barrel. Earlier in the day, the Dow had fallen nearly 900 points and other indices had dropped more than 1.5 percent.
Dow Jones Industrial Average rose 239.25 points (0.50 percent) to close at 47,740.80
S&P 500 gained 55.97 points (0.83 percent) to end at 6,795.99
Nasdaq Composite advanced 308.27 points (1.38 percent) to 22,695.95
However, US futures slipped this morning:
Dow futures down 119 points (0.25 percent)
S&P futures down 19.75 points (0.29 percent)
Nasdaq futures down 62 points (0.25 percent)
European markets had ended Friday with significant losses.
Asian markets rallied strongly on Tuesday morning.
Japan’s Nikkei 225 jumped about 3.5 percent
Australia’s S&P/ASX 200 rose around 1.5 percent
South Korea’s KOSPI surged nearly 5 percent at the open
Hong Kong’s Hang Seng Index gained about 1.5 percent
Chinese markets were up about 0.75 percent
Indian equities staged a strong rebound from intraday lows on Monday after an early collapse triggered by surging crude oil prices and uncertainty over the war.
Markets had opened sharply lower as crude prices approached $120 a barrel and fears grew that the conflict might drag on. Stocks across sectors and market capitalisation segments fell in early trade.
Later, measures to increase crude supply and a recovery in US futures helped the Indian market recover from the day’s worst levels.
BSE Sensex fell 1,352.74 points (1.71 percent) to close at 77,566.16
Nifty 50 dropped 422.40 points (1.73 percent) to 24,028.05
Nifty Bank declined 1,763.45 points (3.05 percent) to 56,019.80
Broader markets were also weak:
Nifty Midcap 100 down 1.97 percent
Nifty Smallcap 100 down 2.22 percent
Market breadth remained sharply negative.
On the BSE, 886 stocks rose while 3,484 declined
On the National Stock Exchange of India, 634 stocks gained while 2,628 fell
Foreign investors continued to sell.
Foreign portfolio investors sold shares worth ₹6,345.57 crore in the cash market
Domestic institutional investors bought shares worth ₹9,013.80 crore
Except for the IT sector, which rose marginally by 0.08 percent, all major sectors closed lower. Automobiles, banking, financial services, consumer durables, metals, oil and defence stocks saw the steepest declines.
Gold prices remained highly volatile.
The metal dropped to about $5,013.90 an ounce early Monday but later surged to around $5,200 before settling at about $5,138. Hopes of easing tensions in West Asia weighed on prices.
On Tuesday morning, gold slipped to around $5,134.80 before rising again to about $5,154.60.
Silver closed Monday at $87.23 an ounce and rose to around $89.02 this morning
Platinum traded near $2,180
Palladium near $1,665
Rhodium around $11,250
In Kerala, 22-carat gold fell ₹1,440 on Monday to ₹1,18,560 per sovereign.
On the Multi Commodity Exchange of India, gold (24-carat) closed at ₹1,60,387 per 10 grams, while silver settled at ₹2,67,600 per kg.
Most industrial metals fell on Monday.
Copper slipped 0.44 percent to $12,750.35 per tonne
Aluminium declined 0.88 percent to $3,388.64 per tonne
Zinc and nickel rose, while lead and tin declined.
Rubber weak again
Natural rubber rose 0.77 percent in the international market to 195.70 cents per kg.
Synthetic rubber remained unchanged at $14,158.33 per tonne.
Other commodities:
Cocoa gained 2.85 percent to $3,322 per tonne
Coffee rose 1.28 percent
Tea prices remained steady
Palm oil held around 4,375 Malaysian ringgit per tonne
Among petrochemicals:
Polyethylene rose 5.58 percent
PVC slipped slightly
Polypropylene remained unchanged
Urea climbed to $584.50 per tonne
The US Dollar Index slipped to 99.18 on Monday and fell further to around 98.78 early Tuesday.
Euro strengthened to $1.1633
Pound rose to $1.3439
Japanese yen strengthened to 157.64 per dollar
Chinese yuan traded around 6.91 per dollar
The yield on the US 10-year Treasury bond fell to about 4.102 percent as markets bet that easing tensions and lower oil prices could pave the way for interest rate cuts.
The Indian rupee fell to a record low on Monday as crude prices surged close to $120 a barrel, raising concerns about a widening trade deficit.
The rupee closed 59 paise weaker at 92.33 per dollar after touching an intraday low of 92.35.
In the offshore non-deliverable forwards market, the dollar rose to 92.47 overnight but slipped to about 91.82 early Tuesday, suggesting a possible recovery for the rupee when domestic trading opens.
The Chinese yuan weakened to ₹13.29, while the euro slipped to ₹106.65.
Crude oil prices had surged close to $120 a barrel on Monday amid fears that the war could escalate.
Later, prices fell below $110 after signals that the G7 countries might release oil from strategic reserves. Trump’s statement that the conflict could end soon pushed prices below $100.
The decline continued on Tuesday morning.
Brent Crude closed Monday at $98.96 a barrel and fell about 10.5 percent to around $88.83 early Tuesday
West Texas Intermediate slipped to about $85.20
UAE’s Murban crude held around $110.2. Natural gas eased to about $3.079.
Cryptocurrencies recovered.
Bitcoin traded above $69,200
Ether was above $2,020
Solana traded above $86
Sensex: 77,566.16 (−1.71 percent)
Nifty 50: 24,028.05 (−1.73 percent)
Bank Nifty: 56,019.80 (−3.05 percent)
Midcap 100: 56,265.50 (−1.97 percent)
Smallcap 100: 16,132.20 (−2.22 percent)
Dow Jones: 47,740.80 (+0.50 percent)
S&P 500: 6,795.99 (+0.83 percent)
Nasdaq: 22,695.95 (+1.38 percent)
Dollar: ₹92.33 (+₹0.59)
Gold (ounce): $5,138 (−$36)
Gold (sovereign): ₹1,18,560 (−₹1,440)
Brent crude: $98.96 (+$6.27)
