D-Street bounces as traders cover short bets ahead of peace talks

Synopsis

Indian markets saw significant gains on Tuesday, with the Nifty and Sensex rising over 0.9% and 1% respectively. This surge was driven by traders cutting bearish bets ahead of US-Iran peace talks and a moderation in foreign institutional selling. Technical indicators suggest a bullish outlook, with the Nifty potentially moving towards 24,800-25,000.

Mumbai: Indian markets notched up gains on Tuesday, tracking upsides elsewhere, as traders continued to cut their bearish bets ahead of the second round of peace talks between the US and Iran, with the two-week ceasefire set to end on Wednesday.

NSE's Nifty rose 211 points, or 0.9%, to close at 24,576. BSE's Sensex rose 753 points, or 1%, to end at 79,273.

"There has been short covering by traders because of increased hopes of the de-escalation of the conflict, and a moderation in the intensity of FPI selling in recent sessions," said Pankaj Pandey, head of fundamental research at ICICI Direct.

Foreign institutions net sold shares worth ₹1,919 crore on Tuesday. Domestic institutions were buyers worth ₹2,221 crore.

FPIs have sold shares worth ₹44,275 crore in April so far, compared with ₹1.15 lakh crore sales in March .

Agencies

The undertone remained cautious as the US and Iran stepped up their rhetoric ahead of the negotiations, with Donald Trump warning of a resumption of the war if talks fail. Brent crude June futures cooled off marginally to $95 levels on Tuesday evening.

The India Volatility Index or VIX - the street's fear gauge - fell 6.7% to 17.53 levels, indicating traders expect the talks to be a success.

Technical indicators also point to a near-term optimistic set-up.

The Nifty has successfully breached its 50-day moving average, and near-term technical and derivatives indicators suggest a bullish outlook, according to Rajesh Palviya, head of technical and derivatives research at Axis Securities.

"In the coming days, the index could move towards the 24,800-25,000 range, with the positive bias expected to remain intact as long as it holds above the 24,250 level," he said.

Among broad market indices, Nifty Midcap 150 gained 0.5% and Nifty Small-cap 250 rose 0.8%. Out of the total 4,453 stocks traded on BSE, 2,487 advanced and 1,801 declined at Tuesday's close. Elsewhere in Asia, Japan was up 0.9%, China advanced 0.1%, Hong Kong rose 0.5%, South Korea gained 2.7% and Taiwan rose 1.8%.

...moreless

...moreless