Markets Give Up Gains: Nifty Teeters Near 25,100 as Israel-Iran Rift Keeps Investors on Edge

After witnessing a rise of over 1,000 points, markets erased a good portion of those gains made during the early trade session as tensions in the West Asia region kept investors on edge. The Nifty50 index also staged a similar retreat and ended below the 25,100 level mark, after touching a nine-month high during the day. The optimism largely came on the back of US President Donald Trump announcing a ceasefire between Israel and Iran.

"The ceasefire is now in effect. Please do not violate it!" Trump said in a social media post.

However, the optimism remained limited as Iran launched an attack just a few hours after the ceasefire call. "Initially, sentiment was buoyed by reports of a potential ceasefire between Iran and Israel, along with a sharp decline in crude oil prices. However, concerns resurfaced in the latter half following reports of a possible ceasefire violation by Iran, which led to a pullback and erased most of the early gains," said Ajit Mishra – SVP, research, Religare Broking Ltd.

On Tuesday, Sensex30 ended the trading session at 82,055.11 level mark, up by a mere 0.19% or 158 points. Whereas, NSE Nifty concluded the session just inched above the psychological 25k level mark, up by 72 points or 0.29%.

Top Gainers & Losers

Despite the retreat, markets managed to close in the positive territory. Nearly all sectors ended in green, with the Nifty PSU Bank emerging as the top-performing sector. The banking index witnessed a surge of nearly 1.5% and ended the session at 6,939 level mark.

From the Sensex30 pack, Adani Ports, Tata Steel, Kotak Bank, UltraTech Cement and Bajaj Finserv were among the top gainers. Whereas, PowerGrid, Trent, NTPC, Maruti Suzuki and HCL Tech were among the top laggards.

Interestingly, the rally remained robust in broader markets. Both Nifty Midcap100 and Smallcap100 witnessed a rise of over 0.7%.

Nifty Struggles to Breakout 25,100

Despite touching a year-to-date high level, the Nifty50 index struggled to maintain the momentum. "The Nifty's failure to surpass the 25,200-resistance level indicates that the bears are still active and not ready to give in. However, rotational buying across key sectors, along with notable strength in the midcap and smallcap segments, continues to offer trading opportunities," said Mishra.

So far this month, markets have remained stuck in a range-bound movement as geopolitical events continue to keep investor sentiment subdued.

As per analysts, a robust directional trend will depend on how geopolitical events play out in the near-term. Meanwhile, with the upcoming earnings season, markets might receive clear cues.

"Going forward, the sustainability of an uptrend will hinge on the strength of domestic earnings, with optimism surrounding the upcoming Q1 results supported by favourable domestic macroeconomics," said Vinod Nair, Head of Research, Geojit Investments.