Dalal Street Opens Strong As Trump Delays Iran Strike Plan

Indian benchmark indices opened higher on Tuesday, extending Monday’s late recovery as easing concerns over an immediate escalation in the US-Iran conflict lifted investor sentiment. Buying in IT shares, Adani group stocks and renewed foreign inflows supported the rally, even as fuel price hikes and elevated volatility continued to remain concerns.

At around 10:30 am, the BSE Sensex climbed 366.71 points to 75,706.88, while the NSE Nifty advanced 107.45 points to trade at 23,760, moving closer to the crucial 23,800 mark.

The recovery comes after benchmark indices staged a sharp rebound in the previous session, recovering nearly 1,000 points from intraday lows. Market participants are now watching whether the rebound sustains or turns into another short-lived relief rally.

The Nifty Bank remained relatively subdued compared to the broader market and traded with gains of just over 60 points. Analysts believe the 53,000 mark remains a crucial support level, while 54,000 continues to be an important hurdle on the upside.

Trump Pauses Iran Strike Plan

The biggest trigger behind Tuesday’s market optimism came from comments made by US President Donald Trump, who indicated that planned military action against Iran had been paused after requests from key West Asian leaders.

Trump said he had been approached by Qatar's Emir Tamim bin Hamad Al Thani, Saudi Crown Prince Mohammed bin Salman and UAE President Mohamed bin Zayed Al Nahyan to halt military action.

According to Trump, discussions with Iran had intensified and there was hope that a possible agreement could emerge. He suggested that a planned strike had been put on hold and indicated that the move could become permanent if diplomatic efforts progress.

Markets interpreted the remarks as a sign of possible de-escalation in the conflict, reducing fears around further disruption in oil supply and broader geopolitical instability.

Brent crude also reacted positively and traded nearly 2% lower around $109.9 per barrel after touching elevated levels in recent sessions.

IT Stocks And FIIs Support

Technology shares emerged among the biggest gainers during the session as investors continued value buying after recent sharp corrections.

Infosys, HCL Technologies, Tech Mahindra and TCS featured among the biggest gainers in the Sensex pack. Shares of Adani group companies also witnessed buying support and contributed to the benchmark gains.

Foreign Institutional Investors remained net buyers and purchased equities worth ₹2,813.69 crore on Monday, according to exchange data.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said foreign inflows, though still not a trend, indicate that market valuations are becoming increasingly attractive.

He added that concerns around excessive valuations in AI-related stocks globally are also increasing, which may eventually redirect flows toward attractively valued Indian largecaps.

According to Vijayakumar, banking and financial stocks could emerge as beneficiaries if FII buying sustains because valuations in the segment remain reasonable and growth prospects continue to remain healthy.

Fuel Price Hikes Continue

Despite the market optimism, inflation concerns continue to remain in focus after another round of fuel price increases.

Petrol and diesel prices were raised by nearly 90 paise per litre on Tuesday, marking the second increase within a week. This follows the ₹3 per litre increase announced last Friday. With the latest revision, petrol prices in Delhi climbed to ₹98.64 per litre, while diesel prices rose to ₹91.58 per litre.

State-run fuel retailers had kept prices unchanged for several years despite rising global crude prices and mounting pressures linked to the West Asia conflict.

Compressed Natural Gas prices have also witnessed back-to-back revisions. Rates were increased by ₹2 per kilogram earlier this month and raised again by ₹1 over the weekend.

Volatility Remains A Key Concern

While markets traded firmly higher, volatility indicators continued signalling caution. India VIX remained elevated near the 20 mark, suggesting that investors still remain uncertain about the near-term direction of the market.

Vijayakumar said concerns surrounding growth, inflation and currency weakness continue to persist despite recent improvements in earnings and liquidity conditions.

He added that sectors such as pharmaceuticals, defence and power-related companies may remain relatively resilient because they are less exposed to the macroeconomic pressures currently affecting broader markets.

According to Vijayakumar, quarterly earnings suggest that the domestic economy had begun recovering due to earlier fiscal and monetary support measures. He added that a quick resolution of the Strait of Hormuz crisis could significantly improve economic prospects and reduce fears around a sharper slowdown.