Indian markets set for cautious open as geopolitical tensions ease, Asian stocks rally

The Indian stock market is bracing for a cautious start on Tuesday morning, caught between conflicting signals from around the world. Gift Nifty—the early indicator of how the Nifty 50 will open—is trading at 23,130, roughly 44 points below where futures closed the previous day. It's the kind of modest discount that suggests traders are waiting to see which way the wind blows before committing real money.

Monday was brutal. The Sensex fell 719 points, or just under 1 percent, closing at 73,524. The Nifty 50 dropped 243 points, or 1.04 percent, to 23,123. The culprits were familiar: fresh tensions between Iran and Israel, crude oil prices spiking upward, and the persistent worry that the US Federal Reserve might raise interest rates. It was the kind of day that reminds investors why they keep cash on the sidelines.

But overnight, something shifted. Asian markets woke up and climbed. South Korea's Kospi jumped 3.31 percent, while its Kosdaq index surged 4 percent. Japan's Nikkei 225 edged up 0.1 percent and the Topix gained 0.27 percent. The catalyst was partly a rally in semiconductor stocks on Wall Street, where chip makers—Nvidia up 1.73 percent, AMD up 5.14 percent, Intel up 11.2 percent—led a mixed session. The Nasdaq Composite rose 0.86 percent to 25,929, even as the Dow Jones fell 80 points and the S&P 500 gained just 21 points. It was a narrow rally, but a rally nonetheless.

The geopolitical picture, too, showed signs of thawing. Iran and Israel announced they had stopped attacking each other following an appeal from US President Donald Trump. Iranian President Masoud Pezeshkian said Tehran had not abandoned the possibility of negotiations, even after the latest exchange of missile strikes. The ceasefire is fragile—Iran warned it would resume hostilities if Israel continued strikes against Hezbollah in Lebanon—but the fact that both sides stepped back from the brink mattered. Crude oil prices, which had spiked on war fears, eased slightly. Brent crude rose just 0.14 percent to $94.38 a barrel, while West Texas Intermediate gained 0.12 percent to $91.41.

Gold, which typically benefits from geopolitical uncertainty, retreated for a third consecutive day. Spot gold fell 0.2 percent to $4,319.98 per ounce, weighed down by rising US Treasury yields. Silver dropped 0.6 percent to $67.84. The US dollar, meanwhile, held firm near a two-month high, with the dollar index sitting at 100.03, just shy of the 100.21 peak it hit on Monday. The euro weakened to $1.1528 and sterling to $1.3335.

For Indian investors, the message is mixed. Ajit Mishra, senior vice president of research at Religare Broking, counseled caution. The global uncertainty remains elevated, he said, and the prudent approach is to sell into any rallies rather than chase gains. Individual stock opportunities may exist, but only for traders willing to manage their risk tightly. The Indian market will open Tuesday in that familiar posture of waiting—watching to see whether the easing of geopolitical tensions can overcome the headwinds of crude oil volatility and the ever-present question of what the US Federal Reserve will do next. Hong Kong's Hang Seng index futures are pointing to a lower opening there, a reminder that not all of Asia is moving in the same direction. The day ahead will likely belong to whoever can read the global mood most accurately.