Asian markets gained momentum as US President Donald Trump signed an interim deal to end the Iran war and reopen the Strait of Hormuz, with the so-called memorandum of understanding now in effect. According to CNBC TV18, Asian stocks rose 0.5% while contracts on the S&P 500 were up 0.8% and Nasdaq futures increased over 1%. South Korea's Kospi index was up 1%, while Japan's Nikkei 225 was up nearly 2%, reflecting broad-based optimism across the region. The rally follows Trump's announcement that he signed the document at the palace of Versailles near Paris, where he had dinner with French President Emmanuel Macron. However, it remains unclear if Iran has immediately begun taking steps to fully reopen the Strait of Hormuz. As per The Economic Times, US stock futures climbed while oil prices extended their slump as the deal took effect, with Brent crude falling more than 1% early in Asia, dropping below $79 a barrel. Brent crude futures had fallen 89 cents, or 1.12%, to $78.66 per barrel, while U.S. West Texas Intermediate (WTI) crude slipped 98 cents, or 1.28%, to $75.81 per barrel in the latest trading session. In early Thursday trade, WTI crude was trading at $76.10, down 0.69 or 0.90%, while Brent crude stood at $78.86, down 0.69 or 0.87%, as per The Times of India.
Japan's Nikkei 225 Index rose 1.65% to close at 71,053, while the broader Topix Index gained 1.37% to finish at 4,068, marking significant milestones for Japanese equities. According to Business Standard, financial stocks led the gains, with Mitsubishi UFJ Financial Group rising 3.1%, Sumitomo Mitsui Financial Group advancing 4.3%, and Mizuho Financial Group adding 3%. Technology stocks also performed strongly, with Lasertec surging 7.1%, Tokyo Electron gaining 4.7%, and SoftBank Group climbing 4.5%. The agreement helped ease concerns about Japan's economy, which relies heavily on energy imports from the Middle East. Investors largely ignored the overnight decline on Wall Street, where markets reacted to signals from the US Federal Reserve that support for a rate hike this year is increasing, as per Business Standard. Overall, improved global sentiment and easing geopolitical concerns supported broad-based buying in Japanese equities.
Japan's Nikkei 225 crossed 71,000 for the first time in the index's history on Thursday, while South Korea's KOSPI also climbed to a record as Asian markets shrugged off Wall Street's worst Federal Reserve day since 1994. According to Carson Group, the Fed held rates steady but spoiled the mood with a much more hawkish dot plot, with the median year-end projection rising to 3.8%, up from 3.4% in March. Kevin Warsh held rates steady at his debut meeting but his committee's updated forecasts sent a very different message, with nine of 18 Fed officials now projecting at least one hike before year-end. On June 17, the S&P 500, the Nasdaq, and the Dow all dropped in stark contrast to Asian markets, with all 11 sectors of the index ending lower and the 2-year Treasury yield surging 16 basis points to 4.22%. Warsh also abstained from submitting his own rate forecast, leaving the committee's direction harder to read, adding to market uncertainty. Wall Street futures slipped 0.2% after the rally overnight as markets digested the Fed's hawkish stance.
The Sensex extended its winning streak to a fourth consecutive session on Wednesday (June 17), closing at 77,155.62, up 347.14 points (+0.45%). According to ET Now, the index opened with a gap-up of around 271 points at 77,080.10 and witnessed initial volatility, touching an intraday low of 76,768.50 before gradually strengthening buying interest. The Nifty rallied 96.55 points, or 0.40%, to end at 24,085.70, with the rally driven by easing geopolitical tensions, lower crude oil prices, softer bond yields and a stronger rupee. As per ET Now, the Sensex jumped 410.51 points, or 0.53%, to an intraday high of 77,218.99 before settling near day's higher levels, reflecting sustained positive sentiment. In the latest session, the Nifty reclaimed the 24,000 mark and the Sensex closed above 77,100, with the benchmark surging 924.1 points or 3.98% in just four days, marking their longest winning streak in ten weeks. Gift Nifty was trading around 24,083 level, a discount of nearly 11 points from the Nifty futures' previous close, indicating a flat start for the Indian stock market indices on Thursday.
The Indian equity benchmark rallied for another session on Wednesday as optimism regarding the truce deal between United States and Iran fuelled risk appetite. According to SBI Securities, the Nifty formed a small-bodied candle with a minor upper wick and a noticeable lower wick, indicating buying interest at lower levels. Market analysts point to a robust 'higher high, higher low' pattern on the daily chart, a classic indicator that suggests a short-term uptrend remains firmly intact. According to Nandish Shah of HDFC Securities, the Nifty's strong close near the day's high reflects sustained buying interest and strengthens the possibility of further upside. "The West Asia crisis is expected to ease, with a deal likely to be signed by the weekend, which has helped soften oil prices and boost investor sentiment over the past couple of sessions," said Pankaj Pandey, head of retail research at ICICI Securities. "The first- and second-order impact on earnings from elevated oil prices is also expected to diminish," he added. Brent crude futures fell 1.5% to as low as $77.7 on Wednesday, extending this week's decline above 9%, with the latest session showing Brent crude falling more than 1% early in Asia, dropping below $79 a barrel. As per The Economic Times, "Trump's signing of the Memorandum of Understanding following the G7 meeting represents another meaningful step toward reopening the Strait of Hormuz," said Rajeev De Mello, global macro portfolio manager at Gama Asset Management. "This should further reduce energy-related risk premia, ease inflation concerns, and provide support for both bond and equity markets after the initial reaction to the Fed."
According to ET Now, India VIX, which measures volatility in the market, dropped over 1% to 13.20, indicating improved market confidence. The broader markets also maintained positive momentum, with the BSE MidCap Select index jumping 1.20% and SmallCap Select index going up by 0.31%. Out of the 4,443 stocks that advanced while 1,956 declined and 1,956 remained unchanged on the BSE, sectoral performance showed Capital Goods surging 2.76%, Industrials up 1.83%, PSU Banks gaining 1.80%, and Consumer Durables rising 1.39%. The Nifty MidCap 150 and Nifty Smallcap 250 indices climbed 0.5% and 0.7% respectively, with the BSE advance-decline ratio at 1.28, indicating healthy participation across the broader market. Sachin Gupta of Choice Broking noted that the Relative Strength Index (RSI) stands at 60.87, indicating strengthening momentum and continued bullish undertones. Elsewhere in markets, the yen fell to its weakest level against the US dollar since July 2024, raising the risk of official intervention, as per The Economic Times.
According to ET Now, sectoral indices showed strong performance with Capital Goods emerging as the top gainer at +2.76%, followed by Industrials (+1.83%), PSU Banks (+1.80%), Consumer Durables (+1.39%), Power (+1.19%), Metals (+1.15%), Information Technology (+0.80%), and Telecommunication (+0.68%). In the latest session, Trent emerged as the top gainer rising 7.3%, while Bharat Electronics and Hindalco gained 3.5% and 2.7% respectively. Among sectors, the Nifty Consumer Durables index advanced 2.1%, while the Nifty PSU Bank and Metal indices gained 1.8% and 1% respectively. Utilities, Auto, Realty were the laggards. Among the 30 Sensex firms, Trent jumped the most by 7.06%, while Bajaj Finserv, Axis Bank, Kotak Mahindra Bank, and Mahindra & Mahindra were among the laggards. In the latest session, Trent, Bharat Electronics and Hindalco Industries emerged as the top gainers, helping lift the broader market sentiment. Consumer Durables, PSU Banks and Metals ended with the most gains, while Auto, Real Estate and Healthcare closed in the red with minor losses. Vodafone Idea was the most actively traded stock in volume terms, with 50.31 crore traded shares, followed by Yes Bank at 39.44 crore traded shares.
