Before the market opens on Thursday (May 21), global cues are looking much better. There has been a wave of relief in global markets due to signs of easing tension between Iran and America. Crude oil prices have fallen drastically, Asian markets are on a strong rise, and GIFT Nifty has also seen a jump of 125 points. As a result, Indian markets are showing signs of a strong start today.
Signs of war ending; Strong rise in GIFT Nifty
Investor confidence has returned amid expectations of easing tensions between Iran and America. GIFT Nifty was seen trading at around 23,850 level, with a gain of about 200 points. Meanwhile, markets in Japan and South Korea saw strong gains of 3% to 6%. However, Dow futures are looking a bit bearish – it’s down 100 points – indicating some weakness.
Trump’s statement brought relief to the market
US President Donald Trump indicated that talks with Iran have reached their final stage. He said that oil prices could fall rapidly. This statement created an atmosphere of relief in the market, as investors feared that a prolonged conflict could increase pressure on global supply chains and inflation.
Iran’s conciliatory stance reduced tension
Conciliatory signals have also been received from Iran. President Massoud Pezeshkian said the lines of dialogue are open and mutual respect is essential in diplomacy. These positive statements from both the countries have raised hopes that the situation will not get worse.
Crude oil prices fall by 5%
As soon as the tension between Iran and America started reducing, there was a huge fall in the prices of crude oil. Brent crude fell nearly 5% to around $105 a barrel. This softening of oil prices is being considered a good news for big oil importing countries like India, because it can reduce the pressure on inflation and current account deficit.
Strong buying in American markets
US markets closed at their highest level of the day. The Dow Jones gained nearly 650 points, while the Nasdaq rose 400 points. A fall in bond yields and hopes of easing geopolitical tensions boosted buying in tech and growth stocks.
Fall in bond yield and dollar index
In the US, 10-year bond yields neared 4.6% after three consecutive days of gains. Meanwhile, the dollar index stabilized around 99, below a six-week high. This development may improve the investment environment in emerging markets.
The shine of gold and silver returned
In the domestic market, silver rose by nearly ₹4,100 to ₹2.74 lakh. Similarly, gold rose by ₹900 to close at ₹1.60 lakh. After four days of decline in the international market (COMEX), both these precious metals saw improvement.
FIIs sell; Domestic funds support continues
Foreign institutional investors (FIIs) made net sales of ₹3,492 crore, which included offloading of about ₹1,600 crore in the cash market. In contrast, domestic institutional investors (DIIs) continued their buying for the third consecutive day and invested around ₹1,968 crore in the market.
Today the market is keeping an eye on the earnings of these companies
Today the market will keep an eye on the earnings results of ITC and Max Healthcare. Additionally, several big players in the F&O segment, including Auro Pharma, GAIL, Prestige Estates and Nykaa, are expected to report quarterly results. In results released yesterday, Apollo Hospitals and Bosch performed better than expected. Jubilant Food’s results were good, while the market considered Sammaan Capital’s earnings particularly noteworthy.
RBI to auction $5 billion swap
The Reserve Bank of India (RBI) is going to conduct a $5 billion swap auction on May 26. The objective of this step is to increase liquidity (cash) in the banking system. RBI will buy dollars from banks and inject rupees in the market, which will support liquidity.
Marginal improvement in core sector growth
In April, the growth rate of the country’s eight core industries increased from 1.4% to 1.7%. This growth was driven by increase in the production of cement, steel, fertilizer and electricity.
PM Modi will preside over an important cabinet meeting today
An important meeting of the Union Cabinet chaired by Prime Minister Narendra Modi is to be held today at 5:00 pm. In this meeting, review of the functioning of the ministries in the last two years, mid-term report card and future plans will be discussed. Market participants will also keep an eye on any major policy decisions or infrastructure related announcements.
