The BSE Sensex rebounded nearly 500 points in the opening session on Tuesday as global investors calmed on no further escalation in the mid-east tensions.
After hitting a high of 41,135.47, the 30-share BSE index was trading 471 points or 1.16 percent higher at 41,144.37. Similarly, the broader NSE Nifty rallied 138 points or 1.15 percent to 12,131.05.
— CNBC-TV18 (@CNBCTV18Live) January 7, 2020
HDFC Bank was the gainer in the Sensex pack, rallying up to 2.16 percent, followed by IndusInd Bank, Reliance Industries, Tata Steel, SBI and Axis Bank. On the other hand, Tech Mahindra, TCS, Infosys and HCL Tech were trading in the red, according to a PTI report.
#CNBCTV18Market | Large cap IT stocks are the top & only losers on the Nifty currently as #rupee opened significantly higher Vs yesterday's close pic.twitter.com/qbbNnwB30y — CNBC-TV18 (@CNBCTV18Live) January 7, 2020
In the previous session, the 30-share gauge ended at 40,676.63, dropping of 787.98 points, or 1.90 percent. Similarly, the Nifty closed at 11,993.05, falling by 233.60 points, or 1.91 percent.
Meanwhile, on a net basis, foreign institutional investors sold equities worth Rs 103.84 crore, and domestic institutional investors offloaded shares worth Rs 23.70 crore on Monday, data available with stock exchanges showed.
According to traders, domestic investors followed Asian stocks that rebounded after a day of no escalation in the US-Iran tussle.
The Pentagon on Monday distanced itself from US President Donald Trump's assertions that he would bomb Iranian cultural sites despite international prohibitions on such attacks.
Following the news, Brent crude futures fell 1.20 percent to $68.08.
Rupee jumps 22 paise to 71.71 as crude oil prices ease
The Indian rupee appreciated by 22 paise to 71.71 against the US dollar in early deals as some easing in global crude oil prices boosted forex market sentiments.
The domestic unit started the session on a positive note and held its ground in early transactions at the Interbank Foreign Exchange.
— CNBC-TV18 (@CNBCTV18Live) January 7, 2020
On Monday, the rupee had settled at 71.93 against the US currency.
Global oil benchmark Brent crude cooled 1.23 percent to $68.06 per barrel after the Pentagon on Monday distanced itself from US President Donald Trump's threats to bomb Iranian cultural sites despite international prohibitions on such attacks.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading marginally higher at 96.66.
Investors have been selling riskier assets and rushing to safe haven assets amid the US-Iran tensions that spurt in the last few days after an American drone strike killed top Iranian general Qasem Soleimani last week.
Asia stocks attempt a rally as Iran anxiety ebbs
Asian shares rebounded on Tuesday as a day passed without a new escalation in the Middle East and Wall Street erased early losses to end in the black as tech stocks climbed.
Oil surrendered some hefty gains as many doubted Iran would strike back in a way that would disrupt supplies and its own crude exports, according to a Reuters report.
Brent crude futures stood at $68.91 a barrel, having been as high as $70.74 at one stage, while US crude fell 32 cents to $62.95.
Gold held firm at $1,563.50, after scaling a near seven-year peak of $1,579.72 overnight.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3 percent, after a 0.7 percent drop the previous session. Japan’s Nikkei edged up 0.5 percent and South Korea 0.6 percent.
E-Mini futures for the S&P 500 held steady.
Shares had fallen sharply on Monday as Iran and the United States traded threats after a US airstrike killed a top Iranian commander.
The mood calmed a little as the session passed with no new aggression.
Instead, there was much confusion when the US, military wrote to Iraq on Monday saying it would pull out of the country, a letter seen by Reuters showed.
Yet US Defense Secretary Mark Esper told Pentagon reporters that no decision had been made and the military said the letter was only a poorly worded draft.
Wall Street chose to hope for the best and the Dow rose 0.24 percent, while the S&P 500 gained 0.35 percent and the Nasdaq 0.56 percent.
Surveys of service sectors out overnight showed some improvement in the United States, UK and EU, stirring speculation the closely-watched ISM measure of US services due later Tuesday will also show strength.
“We think the longest US expansion on record still has plenty of legs,” said Tom Porcelli, chief US economist at RBC Capital Markets. “To be sure, Iran adds an additional layer of complexity.”
“But while the risk of conflict has increased, the reality is this is likely to be limited to proxy skirmishes,” he argued. “The risk of a “hot” conflict seems low as Iran is unlikely to respond in such a way that risks a significant escalation from the United States.”
The calmer mood saw the yen lose much of its safe-haven gains, with the dollar bouncing to 108.37 yen from a low of 107.75 hit on Monday.
The euro edged up to $1.1195, but faces stiff chart resistance around $1.1240, while sterling made gains to $1.3170 on better economic data at home.
Against a basket of currencies, the dollar had drifted off to 97.618 but stayed above the recent six-month trough of 96.355.
--With inputs from agencies
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Updated Date: Jan 07, 2020 10:29:23 IST