Nifty, Sensex Open Gap Up as Trump Signals Pause on Iran Strikes

Trump's Statement on Iran

The reason for the gap-up was a statement made by US President Donald Trump regarding Iran and the Strait of Hormuz. Trump posted on Truth Social that the US and Iran had productive conversations regarding a resolution of hostilities in the Middle East, and that the US was postponing attacks on Iran's power plants and energy infrastructure for five days. He added that US envoys were in talks with a respected Iranian leader and that Iran was open to a deal.

Background to the Tension

Trump had earlier threatened to hit Iran's power plants if Iran did not fully open the Strait of Hormuz, which had been effectively closed to tanker traffic since Iran began targeting shipping. Iran's IRGC had warned that the Strait would be completely closed in the event of any attack on the country's energy grid.

Iran Denies Talks

Iran's parliament speaker Mohammad Qalibaf, denied that any talks with the US had taken place, calling reports to the contrary fake news. Iran's foreign ministry said Trump's move was designed to lower energy prices and buy time for military plans.

Impact on Commodities and Domestic Markets

Despite Iran's denial, markets responded to Trump's de-escalation signal. Crude oil prices fell over 10%. For India, which imports a large share of its oil requirements, lower crude prices reduce inflation pressure, narrow the current account deficit, and bring down input costs across sectors such as aviation, chemicals, and paints. When the statement was made, Gift Nifty had recovered 5% from its recent low, and was trading around 22,836, up nearly 371 points from the previous close.

Gold prices initially rose after the postponement of US strikes, but later declined. Spot gold fell around 2% to $4,406 an ounce, and silver rose 1.78% to $69 yesterday. On the institutional side, Foreign Institutional Investors were net sellers on Monday, offloading equities worth ₹10,414.23 crore, marking their 17th consecutive session of net selling. Domestic Institutional Investors bought shares worth ₹12,033.97 crore during the same session, partially offsetting the outflows.

Global Markets

U.S. markets closed positively ahead of the Indian session. The Dow Jones rose 631 points or 1.38% to 46,208.47. The S&P 500 gained 1.15% to 6,581 and the Nasdaq Composite advanced 1.38% to 21,946.76. Among individual stocks, Tesla rose 3.5%, Nvidia gained 1.59%, and airline and cruise stocks saw strong gains on expectations of lower fuel costs. However, Nasdaq was trading down 1% on Tuesday, indicating some caution returning to technology stocks.

Asian markets also reflected the improved sentiment. Japan's Nikkei 225 gained 3.84%. South Korea's Kospi rose 1.75% and Hong Kong's Hang Seng was up 1.78%.

Current Scenario

Markets did not sustain the opening levels. Nifty moved to 22,740 and Sensex to 73,401 from their opening highs. From a technical standpoint, Monday's high of 22,856 is likely to act as immediate resistance, while 22,300 and 22,000 remain key support levels to watch. Iran's denial of any negotiations means the situation remains unresolved, and investor caution continues to reflect that uncertainty.