Stock markets jump nearly 2% as Trump halts strikes on Iran's energy infra

Mumbai: Benchmark stock indices Sensex and Nifty rebounded by nearly 2 per cent on Tuesday, tracking a rally in Asian peers after US President Donald Trump announced a temporary halt on strikes targeting Iranian energy infrastructure.

The 30-share BSE Sensex jumped 1,372.06 points or 1.89 per cent to settle at 74,068.45. During the day, it soared 1,793 points or 2.46 per cent to 74,489.39.

The 50-share NSE Nifty surged 399.75 points or 1.78 per cent to end at 22,912.40.

From the 30-Sensex firms, Larsen & Toubro, InterGlobe Aviation, Eternal, Asian Paints, Bajaj Finance and UltraTech Cement were the biggest winners.

Power Grid and State Bank of India were the only laggards from the pack.

Trump said on social media that he has extended the deadline for Iran to reopen the Strait of Hormuz, the strategically located shipping lane between the Persian Gulf and the Gulf of Oman, and that he will hold off strikes against Iranian energy sites for five days.

"Indian equities witnessed a constructive rebound, with markets closing on a positive note after the sharp sell-off in the previous session. The recovery was largely driven by a moderation in risk perception, as early signs of potential de-escalation in the ongoing US–Iran tensions helped restore some investor confidence," Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.

The rally also needs to be viewed in context, he said.

"After a sharp, sentiment-driven correction, such rebounds are not uncommon and often reflect a combination of short covering and value buying. Investors typically use such dislocations to accumulate quality stocks at relatively attractive valuations, rather than it being a signal of a structural trend reversal," Hariprasad added.

Asian markets rebounded, with South Korea's benchmark Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index ending sharply higher.

Markets in Europe were trading mostly lower. The US market ended higher on Monday.

"The domestic market witnessed a relief rally following a temporary pause in attacks on Iran’s energy infrastructure, which could lead to further leeway in easing West Asia–related tensions.

"However, caution persists as investors await greater clarity on the developments around the Strait of Hormuz," Vinod Nair, Head of Research, Geojit Investments Limited, said.

Brent crude, the global oil benchmark, jumped 1.96 per cent to USD 101.9 per barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 10,414.23 crore on Monday, according to exchange data. Domestic Institutional Investors (DIIs), however, bought stocks worth Rs 12,033.97 crore.

On Monday, the 30-share BSE Sensex dived 1,836.57 points or 2.46 per cent to settle at 72,696.39. The Nifty tanked 601.85 points or 2.60 per cent to end at 22,512.65.