Indian Shares Seen Higher On Optimism Over US-Iran Peace Deal

(RTTNews) - Indian shares look set to open higher on Thursday amid optimism over a potential U.S.-Iran peace deal and easing concerns about inflationary pressures.

U.S. President Donald Trump said he has had "very good talks" with Iran over the past 24 hours and it is "very possible" that there will be a deal before his scheduled trip to China next week. Trump threatened to resume bombardment if negotiations fail apart.

Tehran said it was reviewing the latest peace proposal and exchanging diplomatic messages via mediator Pakistan.

Benchmark indexes Sensex and Nifty jumped around 1.2 percent each on Wednesday after Trump temporarily suspended "Project Freedom" in order to resume peace negotiations with Iran.

The rupee surged by 68 paise to close at 94.61 against the dollar, logging its steepest single-day gain in over a month, as Brent crude prices slumped by $8 a barrel towards $100 per barrel following positive indications from Iran and the U.S. regarding diplomatic efforts to ease tensions.

Foreign investors net sold shares worth Rs 5,835 crore on Wednesday, while domestic institutional investors net bought shares to the extent of Rs 6,837 crore, according to provisional exchange data.

Asian stocks soared to record highs this morning, and the U.S. dollar index slipped while Brent crude prices were little changed around $101 a barrel after plunging nearly 8 percent in the previous session. Gold held steady near a one-week high above $4,700 an ounce.

U.S. stocks rose sharply overnight after reports emerged that the U.S. and Iran are getting close to an agreement on a one-page memorandum of understanding.

The tech-heavy Nasdaq Composite surged 2 percent and the S&P 500 added 1.5 percent to reach record closing highs while the narrower Dow gained 1.2 percent.

Axios reported that the deal would include Iran committing to a moratorium on nuclear enrichment and both sides lifting restrictions around transit through the Strait of Hormuz.

Adding to the optimism about a peace deal, President Trump said the U.S. would pause its efforts to escort ships through the Strait of Hormuz.

Investor sentiment was also boosted by AMD's upbeat forecast and strong private payrolls data pointing to more evidence of a stable labor market.

European stocks soared on Wednesday amid hopes that the U.S. and Iran are nearing a deal to end the Middle East conflict.

The pan-European STOXX 600 rallied 2.2 percent. The German DAX jumped 2.1 percent, France's CAC 40 soared 2.9 percent and the U.K.'s FTSE 100 surged 2.2 percent.