Markets rise for third day as ceasefire boosts global mood

Equity benchmark indices extended their winning streak for a third consecutive session on Thursday, 26 June, buoyed by positive global sentiment following a ceasefire agreement between Iran and Israel. The development has eased geopolitical tensions in the Middle East, lifting investor confidence across global markets.

In early trade, the 30-share BSE Sensex climbed 163.27 points to 82,918.78, while the broader 50-share NSE Nifty advanced 64.35 points to 25,309.10. As the session progressed, both indices strengthened further, with the Sensex rising 415.98 points to 83,171.49 and the Nifty up by 115.50 points at 25,359.45.

Among the top gainers on the Sensex were Bharat Electronics Ltd, Tata Steel, Eternal, Bharti Airtel, Bajaj Finance, and Adani Ports. On the other hand, Tech Mahindra, Kotak Mahindra Bank, State Bank of India, and Tata Consultancy Services registered losses.

Commenting on the market trend, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “With the ceasefire between Israel and Iran, global markets are displaying a risk-on sentiment. However, uncertainty remains over the reciprocal tariff issue, which could limit the extent of the rally. The market is likely to remain focused on developments expected around July 9, when the 90-day pause on the reciprocal tariff issue comes to an end.”

The optimistic mood was mirrored in key Asian markets as Japan’s Nikkei 225 and China’s SSE Composite Index traded higher, although South Korea’s Kospi and Hong Kong’s Hang Seng indices moved in the opposite direction. US markets ended on a mixed note overnight.

In the currency market, the Indian rupee appreciated by 21 paise to 85.87 against the US dollar in early trade, bolstered by weakness in the greenback across global markets.

The dollar index slipped 0.27 per cent to 97.41, retreating after strengthening in the previous session. Forex analysts cited growing speculation over a potential early announcement by US President Donald Trump regarding the next Federal Reserve Chair as a factor weakening the dollar.

At the interbank foreign exchange market, the rupee opened at 85.91 and strengthened further to 85.87. On Wednesday, it had settled 3 paise lower at 86.08 against the dollar amid heavy dollar demand from oil companies and foreign portfolio investors.

“While the rupee opened stronger due to the dollar index decline and a rise in the euro, sharp gains were capped by elevated crude oil prices and continued FII outflows,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.

Meanwhile, Brent crude, the global oil benchmark, edged higher by 0.22 per cent to USD 67.83 a barrel. In futures trade, it rose further by 1.30 per cent to USD 68.01 per barrel, supported by a substantial drawdown in US inventories and optimism over sustained demand. Analysts also noted that the Iran-Israel truce has helped ease concerns about potential supply disruptions in the region. 

Despite the buoyant mood in equities, foreign institutional investors (FIIs) continued to offload shares, selling equities worth Rs 2,427.74 crore on Wednesday, as per exchange data. However, this was nearly matched by domestic institutional investors (DIIs), who purchased stocks worth Rs 2,372.96 crore.

On Wednesday, the BSE Sensex had surged 700.40 points to close at 82,755.51, while the NSE Nifty had advanced 200.40 points to settle at 25,244.75.

With geopolitical tensions easing and global cues turning favourable, investor sentiment appears to have regained strength, though uncertainties around trade policies and oil prices may keep markets volatile in the near term.