Sensex, Nifty rebound sharply up over 2%, amid easing Iran tensions and global optimism

The BSE Sensex opened at 73,630.84, surging 1683.29 points or 2.34% at 9:17 am, compared to its previous close of 71,947.55 on Monday. Similarly, the NSE Nifty 50 began the session at 22,823.05, up 491.65 points or 2.20%, after ending Monday at 22,331.40.

In the currency market, the Indian Rupee opened weaker at 96.717 against the US dollar, compared to its previous close of 93.57. Meanwhile, crude oil prices remained relatively stable, with Brent crude at USD 105.65 and WTI crude at USD 107.17, slightly below Monday's close of USD 107.39.

Global cues remained supportive, with Asian markets rallying on hopes of a diplomatic "offramp" in the ongoing Iran conflict. Equities across Japan, South Korea, and Australia advanced, lifting the broader MSCI Asia Pacific Index by 1.6%. Investor sentiment improved after indications that geopolitical tensions could ease, potentially restoring stability to energy and equity markets after weeks of volatility.

Ajay Bagga, market and banking expert, highlighted the shift in sentiment, stating, "The geopolitical tectonic plates shifted overnight as the 'Trump Peace' narrative took center stage, sparking a relief rally across global risk assets. After a brutal March, the markets are finally exhaling."

He added that the announcement of a potential de-escalation timeline has been pivotal: "President Trump indicated that U.S. operations in Iran could conclude within 2-3 weeks, provided a negotiated settlement is reached. This 'offramp' is being interpreted as a key trigger for the current rally."

Bagga also pointed to signals from Iran, noting, "The willingness from Tehran to consider a truce, albeit with 'essential guarantees,' marks the strongest indication yet that both sides are seeking an end to hostilities."

Reflecting on recent market performance, he remarked, "March was the 'cruellest month' for global equities since 2020, with Indian markets correcting nearly 10% amid supply disruptions in the Strait of Hormuz." Looking ahead, he maintained a cautious stance: "We are transitioning from a 'war economy' to a 'truce watch.' Volatility will remain elevated until there is clarity on reopening critical shipping routes."

Ponmudi R, CEO of Enrich Money, explained that the sharp gap-up in Indian markets is supported by strong global cues and a moderation in crude oil prices, which have eased below the USD 105 mark.

"U.S. markets closed on a robust note, with the S&P 500 gaining nearly 3% and the Nasdaq rising over 3.5%, while Asian markets have also opened strong, with the Kospi up over 5% and the Nikkei gaining more than 3%, indicating a firm positive start for domestic equities. Additionally, Brent crude oil has eased below the $105 mark, providing further support to sentiment," he said.

"The ongoing US-Israel-Iran conflict remains a key overhang, keeping global sentiment cautious and event-driven," Ponmudi R stated. He highlighted that Foreign Institutional Investors continue to be aggressive sellers, with record outflows exceeding Rs 1 lakh crore in March, while the Indian rupee has weakened near the 96 per USD mark.

He further noted that the Bank Nifty is expected to open above 51,000, but the 51,600 zone is likely to act as immediate resistance. Only a sustained move above these levels would confirm a shift in sentiment, as the broader market structure remains cautious.

On the domestic front, Shrikant Chouhan, Head of Equity Research at Kotak Securities, underscored the severity of the recent sell-off. "Monday's session saw a massive decline, with only 73 stocks advancing against 2,753 declines. This reflects extreme fear in the market, which often coincides with bottom formation phases," he said.

Chouhan noted that key technical levels were breached in the previous session. "The market broke below crucial support at 22,500 for Nifty and 72,500 for Sensex. These levels will now act as immediate resistance in the short term," he explained.

Overall, the strong opening reflects a mix of global relief and technical rebound, though market participants remain cautious amid lingering uncertainties around geopolitical developments and macroeconomic stability. (ANI)