Opening bell: Strong opening seen for Sensex, Nifty on Israel-Iran ceasefire

The Indian equity benchmarks, the BSE Sensex and the NSE Nifty, are set to open on a solid note on Tuesday, tracking a strong rally in the global equity markets after U.S. President Donald Trump announced a tentative ceasefire between Israel and Iran. The ease in geopolitical tensions, resulting in a fall in crude oil prices, and a dovish interest rate commentary from U.S. Federal Reserve Governor Michelle Bowman are poised to lift sentiment.  

At 7:45 a.m., the GIFT Nifty futures were trading 262.5 points, or 1.05%, higher at 25,240, indicating a strong start for the Sensex and the Nifty50.

On Monday, the Indian equities market ended lower, in sync with its Asian peers, amid escalated tensions in the Middle East after the American bombing of three nuclear facilities in Iran. Paring half of the early losses, the BSE Sensex closed the week's first trading session at 81,896.79, down 511.38 points, or 0.62%, after falling as much as 1% in opening deals. Similarly, the NSE Nifty50 settled at 24,971.90, lower by 140.50 points, or 0.56%. The broader markets showed resilience and ended in positive terrain, with the Nifty Midcap100 and Smallcap100 indices gaining 0.36% and 0.70%, respectively. 

U.S. stocks rally on fall in oil prices, rate cut hopes

In overnight trade, Wall Street ended higher in choppy conditions on Monday as oil prices dropped coupled with Tehran’s relatively measured retaliation to the U.S. strikes on three Iranian nuclear sites over the weekend. Last night, Iran launched "multiple missiles" at U.S. military bases in Qatar in response to American strikes on its nuclear facilities, which were intercepted by Qatari defences, and no casualties were reported.

The market sentiment was further lifted by dovish interest rate commentary from U.S. Federal Reserve Governor Michelle Bowman. Speaking in Prague, Bowman said she would support an interest rate cut at the Fed’s next policy meeting in July.

The S&P 500 ended 0.96% higher, the Nasdaq composite gained 0.94%, and the Dow Jones Industrial Average added 0.89%.

Asian shares follow Wall Street higher

Snapping previous sessions’ losses, equity markets in the Asia-Pacific region witnessed strong buying, following positive closing on Wall Street overnight. The sentiment was boosted after U.S. President Donald Trump claimed that Israel and lran had agreed to a “complete and total ceasefire” soon after Iran launched a limited missile attack on a U.S. military base in Qatar. Amid hopes of ease in geopolitical tensions, oil prices dropped as concerns over supply disruptions ebbed.

In the Asia-Pacific region, South Korea’s Kospi was the top performer with a 2.5% gain, followed by the Taiwan Weighted index, which rallied over 2%. Japan’s Nikkei 225 index climbed over 1%, while Hong Kong’s Hang Seng and China’s Shanghai Composite added 1.3% and 0.56%, respectively, in early trade.

Among others, Singapore’s Straits Times surged 0.6%, while Australia’s ASX 200 was up over 1% in the final hour of trade.

Crude oil prices fall to one-week low

In overnight trade, international crude oil prices declined by as much as 8% after Trump announced the ceasefire. Cheering the news, Brent crude futures had declined 8%, while U.S. crude contract West Texas Intermediate (WTI) futures for August fell over 5%. 

At the time of reporting, Brent oil futures were trading at $69 per barrel, down 2.14%, while the WTI futures for August contract was down 2.4% at 66.85 a barrel.