The BSE Sensex closed 544 points higher at 76,808 on Tuesday, extending its winning streak to a fourth consecutive session, according to Business-Today. The rally was fueled by the execution of a peace deal between the US and Iran and a sharp decline in global crude oil prices, which boosted expectations of restored energy supply chains in the Persian Gulf.
Market Rally on Peace Deal and Oil Slide
The day's trading began with the Sensex up about 300 points and steadily gained ground to close at levels not seen in over a month. According to Vinod Nair of Geojit Investments, "domestic equity markets continued the recovery momentum, buoyed by growing optimism around a de-escalation in US–Iran tensions and softening crude oil prices." The rally came despite net selling by foreign funds and almost zero net buying by domestic funds, raising doubts among market players about the sustainability of the upmove.
Crude Oil Plunges Below $80
Crude oil prices fell sharply, with Brent crude trading below the $80/barrel mark for the first time in over three months. In early US trades, Brent was at $78.9, down 5.2%, while WTI crude traded at $75.2, down 5.4%. The decline reflects strong expectations that energy supply chains in the Persian Gulf region will be restored soon following the peace deal.
Global and Domestic Market Data
A comparison of key market metrics highlights the day's strong performance:
| Index | Value | Change |
|---|---|---|
| BSE Sensex | 76,808 | +544 points |
| Dow Jones Industrial Average | 52,031 | +361 points (record high) |
| Brent Crude | $78.9/barrel | -5.2% |
| WTI Crude | $75.2/barrel | -5.4% |
The Dow Jones Industrial Average rose 361 points to 52,031, a record high, as of 11 pm on Tuesday.
Fed Policy Meeting in Focus
Investors are now cautious ahead of the upcoming US Federal Reserve policy meeting, which will be the first under the newly appointed central bank chief. While the Fed is widely anticipated to hold rates, market participants will closely watch forward guidance and commentary on the trajectory of monetary policy in the world's largest economy, Nair noted.
GIC OFS Gets Strong Response
In the primary market, the government's offer for sale (OFS) in GIC received a good investor response on the first day. As a result, the government decided to offer an additional 3% stake, taking the total size to 5% of the company. The OFS aims to mobilise about Rs 3,000 crore. This development underscores continued investor appetite for government divestment initiatives.
With the peace deal executed and oil prices cooling, markets may see sustained positive sentiment in the near term. However, the muted participation from domestic and foreign funds — net selling by foreign funds and near-zero net buying by domestic funds — suggests that the rally's durability remains uncertain, particularly with the Fed meeting looming.
Sources:
