Sensex, Nifty Likely To Open Higher Today As Mideast Tensions Ease

Domestic stock markets are likely to start Thursday's session on a positive note amid gains in Asian peers as the US and Iran backed away from the brink of further conflict in the Middle East. The Singapore Exchange (SGX) Nifty futures - an early indicator of the National Stock Exchange (NSE) Nifty index in India - climbed up as much as 132.5 points to 12,201.00 ahead of the opening of Indian markets. At 8:30 am, the SGX Nifty futures were up 120.50 points - or 1.00 per cent - at 12,189.00.

Equities in other Asian markets rebounded with MSCI's broadest index of Asia-Pacific shares outside Japan rising 1 per cent, reversing Wednesday's losses. Japan's Nikkei rose 1.8 per cent, lifting stocks to their highest for the year so far.

US President Donald Trump responded overnight to an Iranian attack on US forces with sanctions, not violence. Iran offered no immediate signal it would retaliate further over a January 3 US strike that killed one of its senior military commanders.

Meanwhile, crude oil returned to the levels seen before the killing of the Iranian commander, Qassem Soleimani, in Baghdad, a strike that raised fears of an escalating regional conflict. Brent futures - the global benchmark for crude oil - prices crept up from month lows hit overnight to $65.84 per barrel, about where they began the year.

The government lifted restrictions on the use of coal mined domestically and eased bidding rules from March,as the country aims to attract foreign mining companies and reduce imports of the fossil fuel. 

India plans to introduce global tenders for coal mining blocks in March, Coal Minister Pralhad Joshi said after cabinet approved the plans, a move that could end state-run Coal India's near-monopoly of the fuel.

Previously, the government restricted the end use of the fuel, with winners of coal block auctions only allowed to use output for specific purposes and not to sell it in the open market. That attracted criticism from the industry which said the rules discouraged bidding.

Analysts say some correction can be expected in the near term before the markets return to record levels.

“Nifty is in a corrective phase after the rally seen in the last few months. Overall trend remains positive with downside support seen at 11700 levels… Banking and metals continue to remain preferred sectors,” said Sahaj Agrawal, head of research-derivatives at Kotak Securities.

On Wednesday, the S&P BSE Sensex index had ended 51.73 points - or 0.13 per cent - lower at 40,817.74 and the broader NSE Nifty benchmark settled at 12,025.35, up 27.60 points - or 0.23 per cent - from the previous close.