Indian stock market: Sensex, Nifty 50 end with modest gains amid reports of Iran violating ceasefire

The Indian stock market witnessed swift profit booking, dragging the benchmark Sensex down by over 1,100 points from its intraday high, while the Nifty 50 briefly slipped to 25,000 during Tuesday’s trade on June 24, following reports that Israel accused Iran of violating the ceasefire and ordered strikes on Tehran.

The Sensex opened at 82,534.61 against its previous close of 81,896.79 and surged over 1,100 points, or more than a per cent, to an intraday high of 83,018. The 30-share pack, however, erased most gains and fell over 1,100 points from its intraday high to an intraday low of 81,900.

The Nifty 50 opened at 25,179.90 against its previous close of 24,971.90 and jumped more than 1 per cent to an intraday high of 25,317.70. The benchmark index, however, dropped to an intraday low of 24,999.70 in the afternoon session.

Finally, the Sensex closed 158 points, or 0.19 per cent, higher at 82,055.11, while the Nifty 50 settled at 25,044.35, up 72 points, or 0.29 per cent.

The BSE Midcap and Smallcap indices rose 0.56 per cent and 0.71 per cent, respectively.

"Initial gains in the domestic market, driven by the ceasefire announcement and sharp drop in crude prices, were short-lived as renewed geopolitical tensions in the Middle East unsettled investor sentiment," Vinod Nair, Head of Research, Geojit Investments, observed.

"Adding to the uncertainty was heightened volatility due to expiry day dynamics. Although the market attempted to break out of its recent consolidation range, persistent global risks continue to impede momentum," said Nair.

Israel-Iran news keeps markets volatile

The domestic market witnessed volatility after media reports suggested Israeli Defence Minister Israel Katz had ordered the military to strike Tehran after Iran fired missiles in violation of a ceasefire.

"In light of Iran’s blatant violation of the ceasefire declared by the President of the United States — through the launch of missiles toward Israel — and in accordance with the Israeli government's policy to respond forcefully to any breach, I have instructed the IDF (Israel Defence Forces)... to continue high-intensity operations targeting regime assets and terror infrastructure in Tehran," Reuters quoted Israeli Defence Minister Israel Katz as saying on Tuesday.

Earlier, US President Donald Trump announced on Monday that Israel and Iran had agreed to a complete ceasefire.

Meanwhile, Iran has denied violating the ceasefire.

Experts noted that geopolitical uncertainty will continue to keep the market volatile, despite widespread speculation that tensions between Israel and Iran may not persist for long.

Geopolitical uncertainties appear to be the new normal now, keeping the markets on bouncy tracks.

In the context of the Indian stock market, volatility in crude oil prices is a significant negative, as India is one of the largest importers of crude globally. Elevated crude prices raise the risk of a wider trade deficit, weaken the rupee, fuel inflationary pressures, impact foreign capital inflows, increase input costs for corporates, and dent their profitability.

Brent Crude, meanwhile, crashed nearly 4 per cent, as investors keenly observed developments in the Middle East. 

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