Opening Bell - Morning Commentary

Markets Celebrate Trump's Peace Overtures

U.S. stock indexes posted their best single-day performance since early February, after a five-day pause in planned military strikes against Iranian infrastructure. The Dow gained over 630 points, the S&P 500 rose 1.15%, and the Nasdaq climbed 1.38%.

Iranian state media, however, denied that any direct negotiations had taken place.

Oil markets reversed, a relief that lifted airline and cruise line stocks, which had been under pressure from soaring fuel costs.

Asia-Pacific markets rallied sharply on Tuesday. South Korea's Kospi surged 3.5%, while Japan's Nikkei 225 advanced 2.2%, aided by data showing headline inflation fell to 1.3% in February — its lowest reading since March 2022 — giving the Bank of Japan room to hold off on rate hikes.

The diplomatic shift pulled capital out of safe-haven assets. The 10-year Treasury yield fell to 4.34%, and gold briefly dropped toward $4,100 an ounce before stabilising near $4400 as investors rotated back into equities.

Indian equity markets suffered a significant crash yesterday as geopolitical friction between the U.S. and Iran intensified. The Sensex plunged over 1,800 points, while the Nifty dropped approximately 2.6% to settle near the 22512 level, driven by widespread risk aversion across nearly all sectors.

The Indian rupee fell to a record low of 93.94 against the U.S. dollar. This depreciation is largely attributed to escalating import energy costs for India and sustained capital outflows from foreign portfolio investors who have withdrawn over ₹1 trillion so far this year.

Fitch Ratings has increased India's economic growth projection for the fiscal year ending March 2026 to 7.5%, citing robust domestic demand and infrastructure investment.

Despite the previous session's heavy losses, early indicators suggest a positive opening for Indian markets. The GIFT Nifty is indicating a 1.5% higher opening, reflecting a potential recovery following reports of a possible de-escalation in the Middle East conflict.

Equity markets have corrected roughly 15% from their recent highs, driven by geopolitical uncertainties. While there are early signs of a potential truce, the outcome of these peace talks cannot be predicted with certainty. If one waits for a complete cessation of hostilities before acting, current price levels may no longer be available. It is therefore prudent to begin deploying capital into markets where stocks have corrected sufficiently, and valuations offer an adequate margin of safety. A reasonable strategy would be to deploy at least 25% of the capital you have been holding in reserve for the right opportunity. That opportunity is now — the time has come to begin taking measured risks.