Summary:
Indian benchmark indices surged on June 15, with the Sensex rising over 1,100 points and the Nifty gaining more than 330 points, as easing Iran-US tensions boosted global risk sentiment. Expectations of smoother crude oil supplies through the Strait of Hormuz pushed oil prices lower and strengthened the rupee, supporting foreign investment inflows. Broader markets advanced, led by realty, auto, and financial stocks, while India's May retail inflation remained below the RBI's 4% target despite a slight increase.
Equity indices in India saw a steep surge on Monday, June 15, as investors reacted positively to news regarding a pact that the United States signed with Iran. The improved geopolitical situation in West Asia along with lower crude oil prices and the stronger rupee fueled risk-taking sentiment in global equity markets.
According to market data, the Sensex at 9:58 AM was up by 1,110.30 points or 1.47% at 76,638.25, whereas the Nifty 50 index was trading 330.80 points higher, or 1.40% at 23,953.70. As per earlier market quotes at 9:18 AM, the Nifty was seen up by 341.60 points or 1.45% at 23,964.50, whereas the Sensex was up 1,140.69 points or 1.51% at 76,668.64.
The gains were substantial enough to increase the total market capitalisation of listed firms in BSE by around ₹7.86 lakh crore. The total market capitalization went up to ₹4,69,31,548.57 crore from ₹4,61,45,088.73 crore recorded on June 12.
Iran-US Deal Lifts Global Sentiment
Positive market sentiments were witnessed following the declaration by US President Donald Trump, where it was announced that Washington and Tehran have reached a common consensus for ending the four-month-old dispute in West Asia. There were reports stating that both nations have agreed upon stopping all kinds of military activities, wherein Pakistan acted as a mediator in arranging the peace deal.
Moreover, it is believed that this agreement would further help to open up the strategically vital Strait of Hormuz, alleviating worries related to global energy supplies.
The focus of the investors remains fixed on the signing of the deal, opening of the Strait of Hormuz and the flow of foreign institutional investment.
Rupee Strengthens, Oil Prices Fall
The Indian rupee began trading strongly at 94.60, showing an appreciation of 58 paise from its last close of 95.11 against the US dollar. The Indian rupee got support from the view that lower oil prices and favorable risk sentiment in the international market could trigger foreign capital flows to India.
Oil prices were seen falling after the peace deal, with Brent crude futures for May delivery dropping by 3.5% to reach $83.79 per barrel and Brent crude falling by 3.95% to reach $83.88 per barrel. US West Texas Intermediate crude was down by 4.68% to $80.91 per barrel.
Broader Markets and Key Global Triggers
The larger market also contributed to the positive performance by increasing Nifty Midcap and Nifty SmallCap indices by 1.4% and 1.7% each. From the list of sectoral indices, Nifty Realty, Nifty Auto, and Nifty Financial Services performed exceptionally well, whereas Nifty Pharma and Nifty Healthcare moved in the negative territory.
With respect to macroeconomic data, retail inflation in India increased to 3.93% in May compared to 3.48% in April. Even though inflation had increased because of increased prices of food articles, it was still lower than the inflation target rate set by the RBI at 4%. It was also within the target range of 2%-6%.
From the global perspective, the US dollar index decreased to 99.492, which is its lowest level since June 5 by 0.31%. At the same time, gold prices were up by 1.8% to trade at $4,297.42 per ounce. On the other hand, Japanese bond yields fell as there were fewer concerns regarding inflation due to geopolitical tensions.
