D-Street bounces as traders hedge short bets ahead of peace talks

MUMBAI: Indian markets gained on Tuesday, rallying elsewhere, as traders continued to trim their bearish bets ahead of the second round of peace talks between the US and Iran, with a two-week ceasefire ending on Wednesday.

NSE’s Nifty closed up 211 points or 0.9% at 24,576. BSE’s Sensex closed up 753 points, or 1%, at 79,273.

“There has been short covering by traders due to increased hopes of easing tensions and softening of FPI selling intensity in recent sessions,” said Pankaj Pandey, Head of Fundamental Research, ICICI Direct.

Foreign institutions sold shares worth ₹1,919 crore net on Tuesday. Local bodies were buyers of ₹2,221 crore.

FPIs have sold shares worth ₹44,275 crore so far in April, compared to sales of ₹1.15 lakh crore in March.

Undertone remained cautious as the US and Iran ratcheted up their rhetoric ahead of the talks, with Donald Trump warning of resuming war if talks fail. Brent crude June futures fell marginally to $95 on Tuesday evening.

The India Volatility Index or VIX – the street’s fear gauge – fell 6.7% to 17.53, suggesting traders expect the talks to succeed.

Technical indicators also point to an optimistic near-term set-up.

According to Rajesh Palvia, head of technical and derivatives research at Axis Securities, the Nifty has successfully breached its 50-day moving average and near-term technical and derivatives indicators suggest a bullish outlook.

“In the coming days, the index may move towards the 24,800-25,000 range, as long as it remains above the 24,250 level, the positive bias is expected to remain intact,” he said.

Among the broader market indices, the Nifty Midcap 150 gained 0.5% and the Nifty Small-Cap 250 gained 0.8%. Out of a total of 4,453 stocks traded on BSE, 2,487 advanced and 1,801 declined at Tuesday’s close. Elsewhere in Asia, Japan rose 0.9%, China 0.1%, Hong Kong 0.5%, South Korea 2.7% and Taiwan 1.8%.