Indian Markets Soar on Easing Mideast Tensions and Weak Dollar; Sensex Gains 1,000 Points

The Indian financial markets concluded Thursday, June 26, 2025, on a high note, reflecting a significant boost in investor confidence. Both the BSE Sensex and NSE Nifty soared by over 1%, propelled by a combination of global and domestic positive cues.

Stock Market Performance

The BSE Sensex surged by 1,000.36 points, or 1.21%, to settle at 83,755.87, while the NSE Nifty50 rallied 304.25 points, or 1.21%, to close at 25,549.00. This marks the third consecutive day of gains for the benchmark indices. The day's trading saw Sensex hit a high of 83,812.09, and Nifty touched 25,565.30.

• Key Drivers:

  • Geopolitical Calm: A major factor contributing to the positive sentiment was the reported ceasefire agreement between Israel and Iran, which significantly eased global geopolitical tensions. This development reduced concerns over potential supply chain disruptions.
  • Weakening US Dollar: A softer US dollar made metal and other commodities more attractive and boosted expectations for increased foreign capital inflows into the Indian market. The US Dollar Index hit a three-year low.
  • Resilient Domestic Economy: The Reserve Bank of India's (RBI) recent bulletin highlighted a robust domestic economy, showcasing strong performance across services, industry, and agriculture sectors. Recent monetary easing, including a 50 basis points rate cut and reduced Cash Reserve Ratio (CRR), further bolstered confidence.
  • Heavyweight Contribution: Sectoral gains were broad-based, with significant contributions from heavyweight stocks like HDFC Bank and Reliance Industries, which led the gains. Reliance Industries notably reclaimed its ₹20 trillion market capitalization today for the first time since September 27, 2024.

• Sectoral Overview: All sectoral indices on the NSE, except Nifty Realty, IT, and Media, ended in positive territory. The Nifty Metal index outperformed, gaining 2.31%, primarily due to the weaker dollar. The Nifty Bank, Financial Services, and Oil & Gas indices also registered gains exceeding 1%.

• Market Breadth and Investor Activity: The overall market breadth remained positive, with 1,474 out of 2,975 traded stocks on the NSE closing higher. Despite the rally, Foreign Portfolio Investors (FPIs) continued to be net sellers, offloading Indian shares worth over ₹9,500 crore in the last three sessions. However, strong buying from Domestic Institutional Investors (DIIs), who hold significant liquidity, largely offset these outflows, preventing a major market drag. Intraday volatility was observed due to monthly derivatives expiry.

Currency Market: Rupee Strengthens

The Indian Rupee (INR) performed strongly, strengthening to a two-week high. It closed at 85.7050 per US dollar, marking a 0.4% appreciation. This surge was primarily attributed to the broad weakness of the US dollar, which faced concerns over the US Federal Reserve's independence and growing speculation of sooner-than-expected interest rate cuts.

Commodity Market: Gold's Appeal Fades, Oil Stabilizes

• Gold: Gold prices in India remained broadly stable or slightly lower. 24-carat gold was priced at ₹97,030 per 10 grams, and 22-carat gold at ₹96,640 per 10 grams. The significant easing of Middle East tensions reduced gold's safe-haven appeal, leading to a notable fall of ₹18,000 per 100 grams for 24-carat gold since June 23. A weaker US dollar provided some counter support.

• Silver: Silver prices observed a modest increase, trading around ₹106,820 per kg.

• Crude Oil: International crude oil prices consolidated near two-week lows, with WTI crude futures hovering around $64.8 per barrel. The easing of Middle East tensions also played a role in stabilizing oil prices, rebounding from recent declines. The Indian Basket of Crude Oil (FOB price) was recorded at $76.14/bbl as of June 23, 2025.

Overall, the Indian market on June 26, 2025, demonstrated a robust "risk-on" sentiment, buoyed by receding global anxieties and positive domestic economic fundamentals.

Tags: Markets