Indian Shares Set To Rally As US-Iran Tensions Ease

(RTTNews) - Indian shares look set to open on a buoyant note on Wednesday after crude oil prices plunged on Tuesday following reports about potential peace negotiations between the U.S. and Iran.

With a ceasefire framework still loosely in place and the U.S. attempting to control the Strait of Hormuz, there are increased hopes for diplomatic de-escalation.

Indian stock markets were closed on Tuesday for Dr. Baba Saheb Ambedkar Jayanti.

Benchmark indexes Sensex and Nifty fell around 0.9 percent each on Monday after the historic U.S.-Iran peace talks failed, fueling worries that the Middle East conflict may last longer than feared.

The rupee slumped by 56 paise to settle at 93.39 against the U.S. dollar amid concerns about rising crude oil prices and continued foreign fund outflows.

Government data released after market hours on Monday showed that India's consumer price inflation accelerated in March, driven by higher food prices.

Consumer price inflation advanced to 3.4 percent from 3.21 percent in February, while analysts had expected prices to rise 3.48 percent.

However, inflation continues to remain well within the central bank's broad tolerance band of 2 percent to 6 percent.

Foreign investors net sold shares worth Rs 1,983 crore on Monday, while domestic institutional investors net bought shares to the extent of Rs 2,432 crore, according to provisional exchange data.

Asian markets tracked Wall Street higher to hit a six-week high this morning on optimism over renewed U.S.-Iran talks.

Oil prices traded lower for a second day running, with Brent crude prices falling to around $94 a barrel after U.S. President Trump told Fox News that he views the war as very close to being over.

Additionally, the International Energy Agency predicted that demand for crude oil will likely see its biggest slump in the second quarter of this financial year.

The American Petroleum Institute reported that U.S. crude inventories increased by 6.1 million barrels in the week ending April 10, marking the eighth straight build.

Treasury yields dipped and the dollar index held steady after seven days of losses as the International Monetary Fund downgraded its global growth forecast for the year amid Middle East tensions.

Gold edged up to trade above $4,840 an ounce as inflation and interest-rate worries eased.

Overnight, U.S. stocks rose sharply to extend gains from the previous session after President Trump indicated in an interview that the second round of U.S.-Iran talks "could happen over the next two days" in Pakistan to work out a deal that could end the war that began on Feb. 28.

Investors also cheered data that showed March producer prices rose by 0.5 percent month-on-month and by 4 percent on a yearly basis, both coming below expectations.

The tech-heavy Nasdaq Composite soared 2 percent and the S&P 500 gained 1.2 percent to reach their best closing levels in over two months, while the Dow climbed 0.7 percent to hit a one-month closing high.

European stocks closed higher on Tuesday amid optimism over possible U.S.-Iran talks and eased concerns about further disruptions to energy supplies.

The pan-European STOXX 600 advanced 1 percent. The German DAX rallied 1.3 percent, France's CAC 40 surged 1.1 percent and the U.K.'s FTSE 100 added 0.3 percent.