Tenuous truce tests markets

GLOBAL MARKETS REMAINED on tenterhooks on Tuesday, in tune with the fast-paced developments in the Israel-Iran conflict.

- KISHOR KADAM & CHRISTINA TITUS

A ceasefire agreement, first announced by US President Donald Trump, lifted market sentiments early in the day — with benchmark equity indices rallying, crude prices tumbling, and rupee gaining against the dollar — but the mood soured hours later as Israel and Iran violated the truce and exchanged fire.

By the end of the day, indices gave up most of their gains as the tenuous truce in West Asia tested investor nerves. The Sensex crossed the 83,000 mark, rising 1,121 points, or 1.37%, at its intraday peak, but finally settled 158.32 points, or 0.19%, higher at 82,055.11. The Nifty also erased sharp intra-day gains to close at 25,044.35, up 72.45 points, or 0.29%.

"Initial gains in the domestic market, driven by the cease-fire news and a sharp drop in crude oil prices, were quickly erased as reports of renewed West Asia tensions unsettled investor sentiment. Volatility was also heightened by Tuesday's expiry day," said Vinod Nair, head of research, Geojit Financial Services.