Markets rise as US-Iran tensions ease, gold recedes from highs

Our Bureau Mumbai | Updated on January 09, 2020 Published on January 09, 2020

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Benchmark index Sensex rallied 1.55 per cent

The possibility of a truce between the US and Iran came as a relief for the stock market on Thursday.

In addition, the US Fed move to inject massive liquidity using repo rate operations also fuelled a global market rally.

Benchmark index Sensex rallied 1.55 per cent, or 634 points, to close at 41,425. The broader index Nifty rose 1.58 per cent, or 190 points, to close at 12,215. The fall in global crude oil prices has been the major trigger for investors to shift their focus back to markets from geopolitics, experts say. Global gold prices, too, cooled off from recent highs of nearly $1,600 per ounce to $1,550.

India’s markets are now focussed on February 1 when Finance Minister Nirmala Sitharaman will present her first full Budget. The government is expected to cut the dividend distribution tax, a move which could boost foreign inflows.

Also on market radar would be large companies announcing their quarterly earnings this week. BusinessLine had reported on January 6 that stock markets were over-reacting to the US-Iran tension as the likelihood of a full-blown war was negligible.

Futures of key US indices including Nasdaq, S&P and Dow Jones were trading higher by more than 0.5 per cent on the back of news of US-Iran truce and the Fed pumping in liquidity, global news reports suggested.

Crude oil prices eased from the high of $70 a barrel to $65 after US President Donald Trump's press conference that indicated signs of Iran tensions cooling.

“Technically, Nifty formed a Bullish Candle on daily scale and negated the formation of lower highs of the last four trading sessions and headed towards 12,224 levels. Now, it has to continue to hold above the 12,150 zone for an up move towards lifetime high of 12,300 and then rally towards 12,400-12,500 zones. On the downside major support is at 11,900-11,835 zones while immediate support shifts at 12,050 levels,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

Published on January 09, 2020
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