Nifty tops 25,300 as bulls make a comeback: Why are markets climbing?

After a strong opening, Indian equities in Tuesday’s session extended earlier gains on hopes of a de-escalation in the Middle East tensions after US President Donald Trump announced a ceasefire between Israel and Iran. At around 11:43 am, the bluechip Nifty50 index was up 1.2 per cent or 299.6 points at 25,271.5, while the BSE’s Sensex was up over 1,005.31 points at 82,902.1. Meanwhile, the Nifty Bank also traded strong, up over 1 per cent led by gains in HDFC Bank, ICICI Bank and SBI among others.

Factors that likely drove rally in Tuesday’s trade 

Israel-Iran ceasefire: After Iran and Israel agreed to a complete ceasefire, there are hopes of de-escalation in the geopolitical tensions. President Donald Trump early Tuesday (Indian time) announced on Truth Social that the two countries have agreed to a “Complete and Total CEASEFIRE” following to what he called as  “THE 12 DAY WAR.”

The dramatic development in the Middle East suggests that the worst of the conflict is over.

The move will ease investors’ concerns about supply disruptions and trigger risk-on sentiment.

Decline in crude oil price: Post Trump’s announcement of a ceasefire, oil prices recorded a sharp fall. After climbing to $81 per barrel on Monday, crude prices plunged by more than 15 per cent. Brent crude futures as at the last count traded with a cut of over 4 per cent at $67.22 per barrel. 

Lower crude prices augur well for the Indian economy as it imports most of its crude oil requirement.

Broad-based buying: Broad-based buying also lifted sentiment on the D-Street with PSU Bank and auto index leading the gains.

S&P raises GDP forecast to 6.5 per cent: Global rating agency S&P Global Ratings today revised its GDP forecast higher by 20 basis points to 6.5 per cent for the ongoing fiscal year 2025-26. The projection of a better monsoon prompted the ratings major to raise its GDP forecast for India. 

In its report detailing the economic outlook for Asia Pacific region, the agency said, “growth picked up after a soft patch”.

Technical factors: Anand James, Chief Market Strategist, Geojit Investments Limited on the Nifty outlook said, “Despite the volatility and the pull back towards close, the inside bar formation yesterday leaves us with hope that the ongoing upside trajectory may persist.”

Momentum continues to be absent, but the 25200-25460 objective looks possible nevertheless, he added.