NEW DELHI: Domestic stocks rebounded on Tuesday in a relief rally as crude oil prices retreated on hopes that Iran may not retaliate to the killing of its major general Qassem Soleimani by US forces, the way markets globally feared.

At 9.30 am, the BSE benchmark Sensex was trading 481 points higher at 41,158.19. The NSE barometer Nifty50 rose 140 points to 12,132.05. Broader market indices also gained, with Nifty Smallcap index rising 1.74 per cent to 5,931 while Nifty Midcap advancing 1.39 per cent to 17,139.

Oil prices slipped, as investors shrugged off concerns over a potential disruption in oil supplies from the West Asia, which accounts for nearly half of the world’s oil production.

Here are a few developments that pushed stocks higher on Tuesday:

Ease in crude oil prices: Oil prices fell more than 1 per cent as investors reconsidered the likelihood of Middle East supply disruptions in the wake of US killing a top Iranian military commander. Brent crude fell as much as 1.5 per cent to $67.86 a barrel and was at $68.09, down 82 cents, Reuters reported. US West Texas Intermediate (WTI) crude futures was at $62.53, down 74 cents, after earlier dropping 1.5 per cent to an intra-day low of $62.30. Prices surged during the previous two sessions, with Brent reaching its highest since September while WTI rose to the most since April.

US-Iran negotiation:
US President Donald Trump is confident that he could still renegotiate the 2015 nuclear deal with Iran, despite the killing of Iran’s senior military commander Qassem Soleimani, White House advisor Kellyanne Conway said on Monday. Conway made these remarks a day after Iran announced that it would retreat further from the 2015 nuclear pact following the killing of Soelimani, reported Al Jazeera.

When asked if Trump believes he can still get Iran to negotiate a new nuclear agreement, Conway told reporters at the White House “He said he’s open. If Iran wants to start behaving like a normal country … sure, absolutely.”

Pentagon’s clarification: The Pentagon distanced itself from President Donald Trump’s assertions that he would bomb Iranian cultural sites despite international prohibitions on such attacks. Defense Secretary Mark Esper said the US will “follow the laws of armed conflict.” When asked if that ruled out targeting cultural sites, Esper said pointedly, “That’s the laws of armed conflict.” Trump had twice warned that he would hit Iranian cultural sites if Tehran retaliates against the US.

Strengthening of
rupee: The rupee on Tuesday jumped 22 paise to 71.74 against the US dollar. A recovery in rupee eased fears of foreign equity outflows. The local currency had declined to the lowest level in two months on Monday, following a sharp surge in global crude oil prices and was further weighed down after an escalation in US-Iran tensions fanned fresh fears of conflict in the Middle East. The domestic unit settled the previous day at 71.93 against the US dollar, down 13 paise against the previous close.

(More to come)

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