Why Did Nifty and Sensex Erase Gains from Day’s High? Did Iran Violate the Ceasefire?

The Indian stock market saw high intraday volatility on June 24 as the Sensex and Nifty 50 erased strong early gains following reports of renewed tensions between Israel and Iran. Investor sentiment, which had initially improved on ceasefire hopes and falling crude oil prices, turned cautious as headlines emerged suggesting Israel had ordered strikes on Tehran.

Indices Showed Early Strength but Ended Flat

The Sensex opened at 82,534.61, up from the previous close of 81,896.79. It gained over 1,100 points in early trade to touch an intraday high of 83,018. However, the rally was short-lived, with the index slipping to an intraday low of 81,900, nearly wiping out all gains. Eventually, it closed just 158 points higher at 82,055.11, a rise of 0.19%.

The Nifty 50 followed a similar trend. It opened at 25,179.90, jumped to a high of 25,317.70, and then dropped sharply to 24,999.70 before closing the day at 25,044.35, gaining 72 points or 0.29%.

Midcap and Smallcap Indices Stay Resilient

Despite volatility in the benchmark indices, the broader market held up well. The Nifty Midcap index rose by 0.71%, while the Nifty Smallcap index edged up 0.72%. This suggested selective buying interest among investors even as headline indices turned volatile. 

Ceasefire Optimism Fades Quickly

Initial gains in the Indian market were driven by positive developments surrounding a ceasefire agreement between Israel and Iran. US President Donald Trump had announced that both countries had agreed to a complete ceasefire. The announcement also led to a drop in global crude oil prices, which further boosted market sentiment during the opening hours.

However, these gains were quickly reversed after news agencies reported that Israeli Defence Minister Israel Katz had instructed the military to strike Tehran, following accusations that Iran had fired missiles in breach of the ceasefire. Iran, on its part, denied any ceasefire violations.

Market Sentiment Hit by Geopolitical Uncertainty

The sharp intraday fall reflected investor concerns about escalating geopolitical risks. Renewed conflict in the Middle East has the potential to impact global oil supply chains and energy prices, which in turn could affect inflation and fiscal conditions in oil-importing countries like India.

Traders and investors turned risk-averse as they sought clarity on the evolving situation. The sudden reversal in sentiment led to profit booking in key frontline stocks, particularly in sectors that are sensitive to crude oil and global cues.

Read More: Blue Cloud Share Price Hits Upper Circuit Ahead of EGM Scheduled on June 27! 

Conclusion

The June 24 trading session highlighted how global geopolitical events can swiftly impact domestic market dynamics. While indices opened strong on the back of positive global cues, tensions in the Middle East triggered a sharp reversal. The volatility also underscored the market’s vulnerability to external shocks, especially during periods of high valuation and global uncertainty.

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