Indian stock markets continued their upward momentum for the third straight day on Tuesday, driven by positive global cues after a peace deal between the United States and Iran eased geopolitical tensions. The BSE Sensex surged 544.15 points, or 0.71%, to close at 76,808.48, while the Nifty 50 also recorded strong gains.
Market rally driven by US-Iran peace deal
The rally was fueled by optimism over the US-Iran peace agreement, which reduced fears of a broader conflict in the Middle East. This development boosted investor sentiment globally, leading to a broad-based buying spree in Indian equities. The Sensex touched an intraday high of 76,846.74, up 582.41 points or 0.76%, before settling slightly lower.
Key sectors perform well
All major sectoral indices ended in the green, with banking, auto, and IT stocks leading the charge. The Nifty Bank index rose over 1%, while auto and IT indices gained nearly 1% each. Market breadth was positive, with 1,828 stocks advancing against 1,504 declining on the BSE.
Broader market indices also gain
The broader markets also participated in the rally, with the BSE Midcap index rising 0.6% and the BSE Smallcap index adding 0.4%. This broad-based recovery indicates renewed confidence among retail and institutional investors.
Global markets react positively
Asian markets mirrored the positive sentiment, with Japan's Nikkei, Hong Kong's Hang Seng, and South Korea's Kospi all posting gains. European markets also opened higher, reflecting the global relief over the de-escalation of US-Iran tensions.
Expert views on market outlook
Market analysts believe that the peace deal could sustain the rally in the near term, but caution that domestic factors such as inflation and corporate earnings will dictate future moves. The easing of geopolitical risks is likely to attract foreign portfolio investments into Indian markets.
Technical analysis
From a technical perspective, the Sensex has formed a strong bullish candle on the daily chart, indicating robust buying interest. The index is now approaching its previous resistance level of 77,000, which could be a key hurdle in the coming sessions.
Investor sentiment improves
The volatility index India VIX fell 5% to 14.5, signaling reduced fear in the market. This decline in volatility, coupled with the peace deal, has encouraged traders to take fresh long positions.
Overall, the stock market's winning streak reflects a combination of geopolitical stability and strong domestic fundamentals, though investors remain watchful of global economic data and central bank policies.
