E-Paper
Sensex, Nifty surge to one-month high after Trump hints at fresh Iran talks
The 30-share S&P BSE Sensex rose 1.48%, or 1,133.53 points, to 77,981.10 even as the wider NSE Nifty 50 regained 24,000 levels.
India's stock market rallied to its highest level in more than a month as a potential diplomatic breakthrough between Washington DC and Tehran reignited investor appetite for risk.
The benchmark NSE Nifty 50 Index surged 1.6% to 24,231.30 in Mumbai, while the S&P BSE Sensex jumped by a similar margin to 78,111.24. Both gauges marked their strongest closing levels since 10 March. All 16 sectoral sub-indexes posted gains as the prospect of de-escalation in the Iran war pulled down crude oil prices to under $100 per barrel.
On Tuesday, US President Donald Trump told reporters that a second round of negotiations with Iran could take place in Islamabad within the next 48 hours. In an interview with Fox News, he characterised the conflict as being “close to over”—a statement that immediately cooled global markets.
“Indian equities are expected to sustain their upward bias as long as the peace talk narrative holds and crude stays in check, though FII flows and geopolitical developments will be closely watched,” Mr. Siddharth Khemka, head of research (wealth management) at Motilal Oswal Financial Services Ltd., said over an email.
Crude Relief
For India, which imports more than 80% of its petroleum needs, crude oil prices is often the single largest determinant of domestic market sentiment. Brent crude slid below the psychological $100 mark to as low as $95.74 per barrel during the session. The energy-driven optimism trickled down into stocks:
InterGlobe Aviation Ltd. (IndiGo): India’s dominant carrier soared 4.8%, leading the Nifty 50, as lower fuel costs promised to bolster bottomline.
Larsen & Toubro Ltd. (L&T): The engineering giant, which maintains a massive order book in West Asia, gained 3.1% on hopes that a cessation of hostilities would protect its regional projects.
Reliance Industries Ltd: The index heavyweight and energy-to-telecom conglomerate climbed 2.2%.
Capital Flight and Rupee
The rupee failed to mirror the stock market’s enthusiasm, settling 9 paise lower at 93.44 against the US dollar. The currency’s weakness was exacerbated by data showing that India's wholesale inflation rate rose to a three-year high of 3.88% in March, fuelled by crude price hikes.
“The currency continues to remain highly sensitive to developments around the Strait of Hormuz, which remains a key risk factor for global oil supply,” said Jateen Trivedi of LKP Securities. “In the near term, the rupee is expected to trade in a range of 93.10–93.65, with direction dependent on further geopolitical developments and oil price movement.”
Sectoral Highlights
Financials, which carry the heaviest weighting in the Nifty 50, rose 1.5%. HDFC Bank Ltd. jumped 1.9%. Technology stocks also saw a robust bid, with Nifty IT rising 2.8% following a strong overnight performance by NASDAQ.
Metal firms Hindalco Industries Ltd. and National Aluminium Co. Ltd. (Nalco) rose 3.4% and 1.4%, respectively, supported by expectations of resilient industrial metal prices.
The day’s notable outlier was Indus Towers Ltd., which fell 4.2%. The telecom infrastructure provider was hit by a downgrade to “underperform” from Jefferies, citing risks related to site renewals and high capex requirements.
Regional Context
The rally in Mumbai aligned with a broader recovery across Asia, where markets rose an average of 1.1%. South Korea’s Kospi and Japan’s Nikkei 225 both ended higher, tracking a Tuesday session on Wall Street where NASDAQ surged nearly 2%.
While the geopolitical situation remains fluid, Mumbai traders appeared content to price in a "best-case" scenario for the remainder of the week.
“Optimism around potential US-Iran negotiations supported a broad-based sentiment, driving oil prices below $100 as expectations of talks outweighed concerns over supply disruption,” said Vinod Nair, head of research at Geojit Financial Services Ltd.
The Indian market was closed on Tuesday for a local holiday. On Monday, prior to the Trump comments, the Sensex had tumbled nearly 1% amid peak anxiety over the Middle East.
