Indian stock market opened in the green, with benchmark indices Sensex and Nifty recovering some of their losses from the previous session after Iran and Israel agreed to pause attacks on each other, pushing oil prices down.
Sensex gained above 350 points to 73,904, while Nifty 50 rose over 111 points to 23,234, as of 9:20 am. This came as India VIX, which measures volatility in the market, declined over 5% to 16.14.
Trent, IndiGo, Axis Bank, ICICI Bank, Bajaj Finance, M&M and Bajaj Finserv shares were the top gainers on Sensex, rising 1-3%. Bucking the trend, Tata Steel, NTPC and Infosys shares declined around 1% each.
The renewed optimism in markets was broad-based, with Nifty Midcap 100 and Nifty Smallcap 100 indices gaining nearly 1% each to outperform benchmarks. Sectorally, Nifty PSU Bank, Nifty Private Bank, Nifty Realty and Nifty Financial Services gained around 1% each. Around 2,179 stocks advanced on NSE, while 413 declined and 83 remained unchanged.
Iran and Israel halted attacks on each other after US President Donald Trump appealed to immediately "stop shooting", although Tehran warned that it can resume strikes if Israel continues to attack Hezbollah targets in Lebanon.
This comes after strong escalations in the Middle East over the weekend. As a result of Iran and Israel halting attacks on each other, oil prices cooled down. Brent crude futures fell around 1% to trade near $93 per barrel, while WTI crude futures declined more than 1% to trade around $90 per barrel.
Meanwhile, a US federal judge on Monday ruled that the $100,000 fee imposed by US President Donald Trump for H-1B applications was unlawful as it was not approved by Congress. "...the Court finds that the Policy imposes a tax on H-1B petitions without the requisite delegation by Congress," US District Court Judge Leo Sorokin said in a ruling.
What lies ahead?
The rebound in tech stocks in the Nasdaq has led to a rebound in chip stocks in South Korea and Taiwan, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. "So, the AI trade continues, though at a subdued pace," he added.
The analyst noted that the decline in Brent crude to below $94 is a positive. However, there is no certainty that the fragile peace in the conflict between Iran and Israel will hold. He added that a US federal judge striking down President Trump’s H-1B visa fee is a mild positive for Indian IT stocks.
"The FIIs’ short position in the market is huge and, therefore, expect volatility today since the weekly expiry may lead to high volumes. The bulls are too weak to stage a strong comeback and the bears are strong enough to press selling on rises. The sustained selling by FIIs shows no sign of fatigue. The large-cap valuations are fair, and in segments like banking, attractive, mainly due to the selling by FIIs. This segment offers a good buying opportunity for investors with a two to three-year time horizon. The risk-reward ratio is favourable for buyers," he said.
After sharply tumbling 9% on Monday, South Korea’s Kospi rallied more than 5% on Tuesday. Japan’s Nikkei gained nearly 2%, while China’s Shanghai Composite was trading in the green with marginal gains. This came on the back of easing tensions in the Middle East, coupled with possible dip buying in semiconductor stocks, which saw a massive decline the previous day.
Wall Street closed in the green on Monday, with the tech-heavy Nasdaq rising nearly 1% after a 4% plunge in the previous session. European markets ended mixed, with the UK’s FTSE closing in the green, but France’s CAC and Germany’s DAX slipping into the red.
