Sensex and Nifty rally on hopes of pause in US-Iran tensions

Indian equity markets opened sharply higher on Tuesday, buoyed by improved global sentiment after indications of a possible de-escalation in tensions between the United States and Iran.

The BSE Sensex rose as much as 2 per cent, gaining over 1,500 points to touch an intraday high of 74,212. Meanwhile, the Nifty 50 advanced 1.62 per cent, opening at 22,878.

The rally was broad-based, with all sectoral indices trading in positive territory. Consumer durables, metals, automobiles and public sector banks led the gains, each rising by up to 2 per cent. Financials and broader mid- and small-cap financial indices also climbed more than 2 per cent, while IT, FMCG, energy and healthcare stocks registered modest gains.

Investor sentiment was lifted after Donald Trump indicated that Washington may hold off on planned strikes targeting Iran’s energy infrastructure. He said the United States had held “productive conversations” with Iran over the past two days and would delay any military action for five days, contingent on ongoing discussions.

However, the claims were disputed by Mohammad Bagher Ghalibaf, Iran’s parliamentary speaker, who denied that any negotiations had taken place. In a statement on social media, he dismissed reports of talks as misinformation aimed at influencing financial and oil markets.

Market analysts attributed the surge to a relief rally following recent declines, supported by positive global cues and short covering. They cautioned, however, that the durability of the uptrend would depend on further clarity around geopolitical developments and movements in crude oil prices.

“While markets have rebounded strongly, underlying risks remain,” a market analyst said, noting that elevated oil prices and lingering geopolitical uncertainty could limit further gains. Investors were advised to remain selective and focus on fundamentally strong sectors such as financials and defensive stocks.

Oil prices continued to remain firm, with Brent crude trading near $104 per barrel, up around 4 per cent, while US West Texas Intermediate crude also recorded gains of over 4 per cent in early trade.

Asian markets mirrored the positive momentum, with Japan’s Nikkei 225 rising 0.69 per cent, Hong Kong’s Hang Seng Index gaining 1.5 per cent, and South Korea’s KOSPI advancing करीब 2 per cent.

On Wall Street, the S&P 500 and the NASDAQ Composite had both closed more than 1 per cent higher in the previous session, setting a positive tone for global equities.

With IANS inputs