Mumbai, June 16 (IANS) Indian equity markets traded higher in morning trade on Tuesday after the United States and Iran reached a preliminary agreement to end conflict.

Sensex rose over 300 points or 0.41 per cent to touch an intraday high of 76,579 in early trade, while Nifty gained around 90 points or 0.36 per cent to trade at 23,941.

Sectorally, buying was seen in realty, IT, consumer durables and financial stocks, with Nifty Realty gaining 0.86 per cent and Nifty IT rising 0.74 per cent.

FMCG, media, chemicals and auto indices also traded in positive territory.

In contrast, metal stocks witnessed selling pressure, dragging Nifty Metal down more than 1 per cent.

From the Nifty pack, Hindalco Industries, JSW Steel, Axis Bank, HDFC Life, Tata Motors Passenger Vehicles (TMPV) and Tata Steel were among the top losers.

Analysts said the sharp correction in Brent crude prices to below $84 per barrel and stability in the rupee have the potential to lend resilience to the market.

“The strong macro headwind of a rising balance of payments (BoP) deficit is no longer a serious issue for the economy. This positive development has imparted stability to the rupee, which has appreciated to 94.71 against the dollar from its recent low of 96.96,” market experts said.

However, analysts cautioned that a weak monsoon remains a concern, as a below-normal rainfall season could fuel inflationary pressures. They said developments on the monsoon front would need to be closely monitored in the coming weeks.

According to senior US officials, the two sides have signed a memorandum of understanding (MoU) aimed at ending the nearly four-month-long war, with a formal signing ceremony expected on Friday.

Moreover, US officials indicated that shipping traffic through the Strait of Hormuz is likely to resume gradually, easing concerns over disruptions to global energy supplies.

On the commodities front, international benchmark Brent crude traded 0.37 per cent lower at $82.86 per barrel, while US West Texas Intermediate (WTI) crude slipped 0.22 per cent to $80.57 per barrel.

Asian markets traded mostly higher. Japan’s Nikkei advanced 0.62 per cent, while South Korea’s KOSPI surged more than 2 per cent. Indonesia’s Jakarta Composite gained around 4 per cent. However, Hong Kong’s Hang Seng declined over 1 per cent.

Overnight, Wall Street ended higher, with the S&P 500 gaining 1.65 per cent and the Nasdaq surging nearly 3 per cent.

–IANS

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