Indian Markets Buoyed by US-Iran Peace Deal
Indian equity benchmark indices, including the Nifty and Sensex, are anticipated to open with gains on Tuesday, extending a rally that saw them climb approximately 3 percent over the past two sessions. This optimistic outlook is primarily fueled by a preliminary peace agreement reached between the United States and Iran.
The landmark deal, which aims to conclude the Middle East conflict and facilitate the reopening of the Strait of Hormuz, has significantly eased concerns regarding potential disruptions to global energy supplies. Consequently, crude oil prices have seen a sharp correction, further bolstering investor confidence.
Global Market Performance: Wall Street Rallies, Asian Markets Consolidate
The positive sentiment was evident on Wall Street, which rallied significantly on Monday following news of the US-Iran accord. The Dow Jones Industrial Average rose 0.92 percent, the S&P 500 gained 1.65 percent, and the Nasdaq Composite surged 3.07 percent.
However, Asian markets presented a mixed picture on Tuesday. While initially boosted by the peace deal news, they later retreated as investors shifted focus to upcoming monetary policy decisions. The Hang Seng index saw a 1 percent decline, while Japan's Nikkei and South Korea's KOSPI remained largely flat.
In commodity markets, Brent crude futures edged up 0.1 percent to $83.25 a barrel after settling at a three-month low overnight. The US dollar index held steady at 99.69, and gold inched 0.1 percent higher to $4,311.12 an ounce. Bitcoin, meanwhile, registered a slight decline of 0.3 percent, trading at $66,281.99.
Expert Insights on Nifty and Sensex Levels
Market analysts are closely watching the developments. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted that improving global risk sentiment and correcting crude prices have boosted investor confidence. He advises tracking the formal signing of the US-Iran agreement, crude oil trends, foreign institutional investor (FII) flows, and evolving inflation expectations for market direction.
Ajit Mishra, SVP of Research at Religare Broking, reiterated that the rally was primarily driven by the US-Iran peace agreement's impact on global energy supply concerns. He recommends a stock-specific approach with disciplined risk management, focusing on select domestic cyclical themes for long positions.
Technically, the short-term outlook for the Indian market remains positive, despite some intraday profit booking. Shrikant Chouhan, Head of Equity Research at Kotak Securities, identified crucial support zones for the Nifty at 23,750 and 23,550. For the Sensex, support levels are at 76,000 and 75,700. As long as the market trades above these levels, the bullish trend is expected to continue. Key resistance levels for the Nifty are 24,000 and 24,100, and for the Sensex, 76,800 and 77,000.
Rupak De, Senior Technical Analyst at LKP Securities, added that the Nifty holding above 23,800 suggests continued positive sentiment with potential for movement towards 24,000–24,200. A breach below 23,800, however, could signal a phase of near-term consolidation.
Nifty Bank Outlook: Key Support and Resistance
The Nifty Bank index experienced some profit booking but continues to trade comfortably above its key moving averages, indicating underlying strength. Sudeep Shah, Head of Technical & Derivatives Research at SBI Securities, highlighted 57,700-57,800 as an immediate hurdle. A decisive move past 57,800 could lead to further buying towards the 58,500 level. Crucial support for Nifty Bank lies between 56,800-56,700.
Bajaj Broking Research noted that while Nifty Bank formed a bearish candlestick, a bullish gap below its base signals a positive bias. After a strong 4,800-point rally in the last 10 sessions, some consolidation cannot be ruled out. They expect the index to maintain a positive bias and head towards 58,300, with dips seen as buying opportunities as long as it sustains above 55,500.
FII and DII Activity
Provisional data from the NSE indicates that Foreign Portfolio Investors (FPIs) turned net buyers of domestic stocks on Monday, with an inflow of Rs 200.05 crore. Domestic Institutional Investors (DIIs) also showed strong buying interest, becoming net buyers of Indian equities to the tune of Rs 3,189.26 crore.