Indian equity benchmark indices, Sensex and Nifty 50, are likely to open higher on Tuesday, tracking strong overnight global cues after US President Donald Trump announced a ceasefire agreement between Israel and Iran.

Asian markets surged, and US markets closed higher overnight amid rising hopes of an early interest rate cut by the Federal Reserve.

However, on Monday, Indian markets closed sharply lower as a broad-based selloff weighed on sentiment due to the intensifying Israel-Iran conflict.

Domestic Market Recap

On Monday, Indian indices closed in the red:

• Sensex crashed by 511.38 points (-0.62%) to close at 81,896.79
• Nifty 50 moved down by 140.50 points (-0.56%) to settle at 24,971.90

Gift Nifty

Gift Nifty was trading near 25,175, around 181 points higher than the previous Nifty futures close, hinting at a positive start for Indian markets.

Wall Street Performance

The US stock market closed higher on Monday, driven by optimism that the Federal Reserve may begin cutting interest rates as early as July.

• Dow Jones Industrial Average rallied by 374.96 points (0.89%) points to close at 42,581.78.
• S&P 500 up by 57.33 points (0.96%), ending at 6,025.17.
• The Nasdaq Composite was trading higher by 183.57 points (0.94%), finishing at 19,630.98.

Crude Oil Prices

Crude oil prices fell to their lowest level in over a week after US President Donald Trump announced a ceasefire agreement between Iran and Israel.

• Brent crude slumped by 3.78% to $68.78/barrel
• US West Texas Intermediate (WTI) crude: -3.88% to $65.85/barrel

Gold Prices

Gold prices dropped to a near two-week low as the ceasefire between Israel and Iran eased geopolitical tensions, reducing the safe-haven demand for the metal.

• Spot gold was trading down by 0.6% at $3,349.89/oz 
• US gold futures slumped by 0.9% at $3,364.20

Overnight Major Global Events Driving Sentiment

1. US Federal Reserve: Federal Reserve Vice Chair for Supervision Michelle Bowman said the central bank is nearing the point of cutting interest rates, citing rising risks to the job market. “It is time to consider adjusting the policy rate.”
2. Israel-Iran Ceasefire: US President Donald Trump declared a “Complete and Total CEASEFIRE” between Israel and Iran, effectively ending what he described as the “12-Day War.” He added that the ceasefire would take effect in 12 hours. However, Iran’s Supreme Leader Ayatollah Ali Khamenei rejected the notion of surrender following Tehran’s missile attack on a US military base in Qatar, an escalation that has deepened regional tensions.
3. US PMI: US business activity slowed slightly in June, though price pressures continued to rise. According to S&P Global, the flash US Composite PMI Output Index slipped to 52.8 from 53.0 in May. The manufacturing PMI held steady at 52.0, defying expectations of a drop to 51.0, while the services PMI eased to 53.1 from 53.7, slightly above the forecast of 53.0.
4. US Treasury Yields: US Treasury yields declined after Fed Vice Chair Michelle Bowman unexpectedly hinted that the first-rate cut could come as early as July. The two-year yield dropped by 5.7 basis points to 3.851%, while the 10-year yield slipped 3.5 basis points to 4.34% after falling more than 6 basis points during the session.

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