Indian Markets Flat at Midday; Stocks Rise on Ceasefire Hopes

Mumbai, April 6: Indian equity benchmarks erased big losses from their morning open at midday on Monday following reports that the US and Iran are discussing terms of a possible 45-day ceasefire that could lead to a permanent resolution to end the conflict. The BSE Sensex reversed course after opening almost 395 points (0.54%) lower at 72,924 and was trading at 73,246, down just 73 points (0.10%) at 12:24 PM. The NSE Nifty 50 also pared most losses from its morning open and traded at 22,710, down just 2.75 points (0.01%) at 12:26 PM. Afternoon gains showed that bargain hunters were out in force buying Indian blue chips following their steep drop in early trading.

Markets Cheer Possible Ceasefire Talks

Axios reported Sunday that Iran and the US are talking to mediators in the Middle East about agreeing to a temporary ceasefire for four weeks that could lead to an eventual permanent resolution to end the conflict. Mediators were reportedly working out “a two-step proposal: A 45-day halt to the conflict would be imposed in phase one, while negotiations to hammer out a permanent settlement would take place over that period,” the report added.

Axios noted that the White House and US State Department declined to comment and Reuters was unable to verify the report immediately. But the report has helped lower geopolitical risk premium that had inflated into Indian equity markets since morning session began.

Compare that with earlier in the session when Trump announced US would be extending the deadline for Iran to stop attacks in the Strait of Hormuz by another 24 hours. The President’s comments stoked oil-price fears that dragged on emerging-market risk appetite in India and elsewhere early Monday.

Wider Market and Sectoral Indices

India’s midcap and smallcap stocks were holding up strong along with blue chips too. Nifty Midcap 150 is trading at 19,905 (up 0.50%), Nifty Smallcap 100 at 15,745 (up 0.61%) and Nifty 500 is at 20,980 (up 0.20%). India VIX continued to hover around the upper 25 level at press time (up almost 1.82%) reminding traders that volatility may still return should tensions flare up in the Middle East again.

Among sectoral indices, Nifty IT is one of the biggest gainers in the morning trading session up 0.75% to 30,670. Nifty IT was already trading in the green at open and has managed to recover from its lows swiftly. Nifty PSU Bank continued its upward trend from open at 0.89% to trade at 8,206 while Nifty Bank is up 0.51% at 51,813. Similarly, Nifty Consumer Durables is rising 1.70% to 33,913 at press time making it the top sectoral gainer midday. Nifty Metal is up 0.76% to 11,543 and Realty added 0.98% to 678. Nifty Oil & Gas was the top loser among sectoral indices midday, falling 2.03% to 10,622 as tensions in the Middle East weighed on oil prices. Nifty Pharma declined 0.71% to 21,653 and Chemicals slipped 0.55% to 25,437. Nifty FMCG dipped 0.35% to 46,070.

Asian Markets

Asian markets were deep in the red across the board muting India’s gains at midday. Indonesia’s JSX Composite Index was Asia’s worst performer, down 2.19% at 7,026. Australia’s S&P ASX All Ordinaries shed 1.25% to 8,774 and Philippines’ PSEi declined 1.31% to 5,920. FTSE Bursa KLCI fell 1.04% to 1,691, VN HNX 30 dropped 1.05% to 534 and Shanghai Composite sank 1.00% to 3,880. SET Index declined 0.80% to 1,454 and Hong Kong’s Hang Seng slipped 0.70% to 25,116. Japan’s Nikkei 225 bucked the trend in Asia and rose 0.55% to 53,413. India’s Sensex is among Asia’s best performers today thanks to its quick recovery towards flat levels in noon trading.

Sources

• https://www.nseindia.com/market-data/live-market-indices
• https://www.reuters.com/markets/asia/
• https://www.bseindia.com