The uptick in markets reflects improving investor sentiment amid expectations that geopolitical tensions may ease following renewed diplomatic signals between the United States and Iran.
US-Iran Developments Drive Market Direction
The trajectory of the US–Iran conflict continues to be the primary driver for global markets, particularly due to its influence on oil prices and investor risk appetite.
Following the collapse of earlier negotiations, tensions had escalated sharply. A blockade on Iranian oil exports and disruptions in the Strait of Hormuz pushed crude prices above $100 per barrel, triggering a sell-off in global equities earlier this week.
However, sentiment has improved after fresh indications that both sides may return to the negotiating table. Reports suggest a second round of talks could be scheduled soon, with US President Donald Trump signalling that the conflict may be nearing a resolution.
While the shift in tone has calmed markets, uncertainty remains elevated, with any setback in talks likely to reverse sentiment quickly.
Top Gainers Lead Early Trade
Among the top gainers in early trade were InterGlobe Aviation, Infosys, Tata Consultancy Services, Eternal, Larsen & Toubro and Bajaj Finance.
Market sentiment received a boost from easing geopolitical concerns and softer crude oil prices, with analysts pointing to renewed hopes of diplomatic engagement in West Asia as a key support for equities.
Analysts See Positive Signals
V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said expectations around the possible resumption of US–Iran talks and discussions between Israel and Lebanon, along with a sharp fall in Brent crude prices, are positive indicators for markets in the near term.
He noted that crude prices have declined by around $10 over the past two days, which could help ease inflationary pressures and support overall risk sentiment.
Institutional Flows Mixed
On the institutional front, foreign investors remained cautious. Foreign Institutional Investors (FIIs) were net sellers on Monday, offloading equities worth Rs 1,983.18 crore, according to exchange data.
Domestic Institutional Investors (DIIs), however, provided support by purchasing shares worth Rs 2,432.30 crore.
Global Markets Track Optimism
Asian equities advanced in early trade, tracking strong gains on Wall Street. South Korea’s Kospi led regional gains, while Japan’s Nikkei 225 and Chinese indices also traded higher.
US markets closed firmly in positive territory overnight, supported by easing inflation concerns and optimism around geopolitical developments, signalling a revival in global risk appetite.
Oil Prices Ease, Support Markets
Crude oil prices declined in Asian trading as hopes of renewed negotiations reduced concerns over prolonged supply disruptions.
Brent crude traded below the $95 per barrel mark, extending its recent correction after sharp gains earlier this week. Lower oil prices are seen as supportive for India, helping ease inflationary pressures and aiding macroeconomic stability.
