The Indian stock market experienced a surge today, with the Sensex rising over 900 points and the Nifty surpassing the 25,200 mark. This positive movement is largely attributed to the announcement of a ceasefire between Israel and Iran, which has eased geopolitical tensions and led to a drop in oil prices.
Following the announcement of the ceasefire, the BSE Sensex jumped 875.03 points or 1.07% to 82,771.82 after opening at 82,534.61, against the previous close of 81,896.79, and the NSE Nifty 50 gained 252.50 points or 1.01% to 25,224.40. The Gift Nifty was trading around the 25,206 level, a premium of nearly 212 points from the Nifty futures' previous close, also signaling a gap-up start for the Indian benchmark index.
The positive sentiment extended to other Asian markets, with MSCI Asia ex-Japan climbing over 1.5%. The drop in oil prices is particularly beneficial for India, which relies heavily on energy imports. Brent crude fell to a one-week low, further fueling the market rally.
Market analysts have noted that the ceasefire has removed a key overhang on investor sentiment. The easing of geopolitical tensions has led to a recalibration of risk, with investors reallocating capital from energy stocks to sectors that benefit from lower fuel costs, such as airlines, trucking companies, and industrial manufacturers.
However, some experts advise caution, noting that the ceasefire may not be a permanent resolution. The market may continue to consolidate unless a clear breakout occurs. Immediate resistance for the Nifty is at the 25,200 level. A sustained move above 25,225 would confirm bullish strength and could lead to further upside, whereas a breakdown below 24,700 might trigger a deeper corrective phase.
On Monday, the domestic equity market ended with sharp losses, with the benchmark Nifty 50 slipping below the 25,000 level. The Sensex crashed 511.38 points, or 0.62%, to close at 81,896.79, while the Nifty 50 settled 140.50 points, or 0.56%, lower at 24,971.90.
Despite Monday's losses, the Nifty remains up 1% for June, marking its fourth consecutive monthly gain. This positive trend is largely attributed to central bank easing policies and robust domestic growth prospects.
The easing of tensions between Israel and Iran has de-escalated the geopolitical storm, leading investors to shift their focus to upcoming global events that could influence markets. One of the key dates on investors' radar is July 9, the deadline related to US tariff decisions. If tariff concerns are deferred or resolved, the markets may continue their upward trend. The positive momentum was seen across broader market indices as well. The Nifty 100 index rose by 1 per cent in early trade. Meanwhile, the Nifty Midcap index jumped 1.13 per cent and the Nifty Small Cap index surged by 1.18 per cent at the time of filing this report.
