Key facts
- Indian stock markets (Sensex and Nifty) closed higher, extending a three-day rally.
- Global markets, including US and European indices, saw gains driven by optimism over a US-Iran peace deal.
- Falling oil prices contributed to the positive market sentiment.
- SpaceX's market value surpassed Amazon's.
- Investors are closely watching the US Federal Reserve's upcoming policy decision and forward guidance.
Global stock markets experienced a broad rally on Tuesday, fueled by optimism surrounding a preliminary agreement between the U.S. and Iran that could lead to a de-escalation of tensions and a potential resumption of oil flows. This sentiment propelled Indian indices, with the Sensex and Nifty closing significantly higher.
In India, the Sensex jumped over 540 points to 76,809, and the Nifty 50 rose more than 135 points to end at 23,989. Broader markets also participated in the gains, with the Nifty Midcap 100 and Nifty Smallcap 100 indices each adding 0.4%. The market volatility index, India VIX, fell 7% to 13.40.
Analysts attributed the market's recovery to growing optimism around reduced US-Iran tensions and softening crude oil prices. Vinod Nair, Head of Research at Geojit Investments, noted that the rally was broad-based, with IT, realty, FMCG, and oil & gas sectors showing notable gains, while metal stocks lagged due to a pullback in global metal prices.
US stocks also saw positive movement, with the Dow Jones Industrial Average touching an intraday record high. Oil prices dropped to a nearly three-month low. SpaceX's shares climbed nearly 9.5%, enabling the company to surpass Amazon in market value. Memory chip stocks like Western Digital and Seagate Technology also saw significant gains. The energy index, however, lost 0.4%.
European markets followed suit, with shares edging higher. Germany's DAX, Britain's FTSE, France's CAC, and the STOXX 600 all closed in positive territory, buoyed by the prospect of increased oil supply.
Technically, the Nifty 50 maintained its strength, staying above the 20 EMA on the hourly chart, indicating a positive short-term trend. However, analysts suggest that upside potential may be limited, with choppy price action likely to continue. Immediate resistance for the Nifty is seen in the 24,070–24,200 zone, with support at 23,900 and 23,700.
Investors are now turning their attention to the US Federal Reserve's monetary policy decision on Wednesday. While the central bank is widely expected to hold interest rates steady, market participants will be closely monitoring the Fed Chair's commentary on inflation, unemployment, and the future trajectory of monetary policy.