Indian Markets Set for Higher Open on Global Rally, Ceasefire

On Wednesday, Indian equity markets closed in negative territory, breaking a four-day upward trend as investors engaged in profit-taking. The benchmark Sensex declined by 153.09 points, representing a 0.19% drop to close at 81,773.66, while the Nifty 50 fell by 62.15 points, or 0.25%, settling at 25,046.15. This pullback occurred despite positive underlying fundamentals, suggesting temporary consolidation after recent gains.

However, early indicators point to a potential recovery in Thursday’s trading session. The Gift Nifty was trading near 25,150, approximately 30 points higher than the previous Nifty futures close, signaling market expectations for a positive opening. This forward-looking indicator reflects renewed optimism driven by international developments and suggests domestic investors are ready to re-enter the market after Wednesday’s pause.

Overnight performance in US markets provided strong positive cues for Asian and Indian markets. The S&P 500 rose by 39.13 points, gaining 0.58% to reach a record closing high of 6,753.72, while the Nasdaq Composite surged by 255.02 points, advancing 1.12% to finish at 23,043.38, also achieving a record high. Technology stocks led this rally, demonstrating continued investor confidence in the sector’s growth prospects.

Meanwhile, the Dow Jones Industrial Average remained virtually unchanged, slipping by just 1.20 points to close at 46,601.78. The mixed performance across major US indices highlights the sector-specific nature of the current market momentum, with technology outperforming more traditional industrial stocks. Asian markets followed the positive trend, trading higher in early Thursday sessions, creating a favorable environment for Indian market opening.

The significant reduction in Middle East tensions provided a major boost to global risk sentiment. US President Donald Trump announced that Israel and Hamas have agreed to the first phase of a peace plan, including a pause in fighting and the release of some hostages and prisoners. According to reports, the first phase of the ceasefire deal will be signed on Thursday in Egypt, marking a crucial step toward resolving the Gaza conflict that had previously weighed on investor confidence.

Simultaneously, monetary policy developments from the United States Federal Reserve contributed to the positive market environment. Minutes from the Fed’s latest meeting revealed that most committee members supported additional interest rate cuts this year. Officials expressed heightened concern about rising unemployment risks, noting that this threat had increased since their July meeting, while inflation risks had either lessened or remained stable.

This dovish stance from the Federal Reserve, combined with easing geopolitical tensions, created a perfect storm of positive catalysts for global equity markets. The combination suggests continued accommodative monetary policy alongside reduced geopolitical risk premiums, both favorable conditions for equity investments across emerging and developed markets.

Crude oil markets reflected the improved geopolitical landscape, with both major benchmarks declining. Brent crude slumped by 0.71% to $65.77 per barrel, while US West Texas Intermediate crude traded 0.85% lower at $62.02 per barrel. The price declines indicate market expectations that Middle East supply disruptions become less likely following the ceasefire agreement.

For the Indian market context, lower crude oil prices provide additional support beyond the positive global equity sentiment. As a major oil importer, India benefits from reduced energy costs, which help contain inflation and improve the country’s current account balance. This commodity market development, combined with the equity market optimism, creates multiple supportive factors for Indian assets as trading resumes on Thursday.