The broader small-caps and mid-caps gained 2% each. (Express Photo)
Benchmark stock indices are up around 1.6% early on Wednesday as trading resumed after a holiday for Babasaheb Ambedkar Jayanti, as renewed hopes of a longer-term peace deal between the US and Iran boosted sentiment across global markets.
The National Stock Exchange’s (NSE) Nifty 50 crossed the psychologically crucial 24,000-point mark and is up 1.6% at 24,216.95 points. The BSE’s Sensex index was up 1.6% at 78,091.34 points. All sectoral indices saw robust gains, with IT, financial services, and banks being the biggest outperformers. The India VIX, which indicates uncertainty in the market, fell over 8% to its lowest level in around a month.
The positive momentum came after reports that the US and Iran could resume peace talks later this week in Pakistan, following the stalemate during the first round. This pushed crude oil prices below $100 per barrel, a significant boost for global markets.
“Hopes of resumption of US-Iran talks, Israel-Lebanon talks and crash in Brent crude by $10 dollars in two days augur well for the market in the near-term. In the near-term large caps are likely to stage a smart come back, but may again face headwinds when FIIs resume selling. The excellent performance of South Korean and Taiwanese markets and the significant market momentum there might nudge FPIs to sell again in India,” said VK Vijaykumar, chief investment strategist at Geojit Financial Services.
Earlier, US Vice President JD Vance said that President Donald Trump wants to make a “grand bargain” in the peace deal with Iran. Vance said Trump conveyed to Iran that they will make Iran economically prosperous if they commit to not having nuclear weapons.
These developments saw global markets also rally. Asian markets, such as South Korea and Japan, are up 1-3%. Overnight, the US market had rallied 1-3%. Market participants globally would hope for progress in the peace talks, with most markets facing the heat from the conflict in West Asia and subsequent higher crude prices.
However, investors remain cautious, having witnessed false dawns earlier. Trump has garnered a reputation for being unpredictable and contradicting himself at times, while Iran has been a tough opponent to negotiate with, maintaining a chokehold on the key Strait of Hormuz waterway, forcing the US to blockade the trade route themselves as the first round of peace talks failed.
© The Indian Express Pvt Ltd
