Indian equities saw a strong rebound with broad-based buying across sectors, driven by easing geopolitical tensions, falling crude prices, and improving global investor sentiment.
Indian stock markets (photo IANS)
Indian equities opened sharply higher on Wednesday, tracking a sudden improvement in global mood after a two-week ceasefire between the United States and Iran eased fears of a wider conflict.
The relief rally came after days of tension in the Middle East had rattled investors and pushed crude oil prices higher. With the announcement of a temporary truce and signals around reopening the Strait of Hormuz, risk appetite returned across global markets.
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The BSE Sensex surged nearly 2,700 points in early trade, while the NSE Nifty climbed over 800 points, both gaining more than 3 per cent. Buying was visible across sectors, with auto, banking, IT, metals and real estate stocks leading the rebound.
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The rally was not limited to a few pockets. Real estate, auto, banking and pharma stocks rose as much as 5–6 per cent. Midcap and smallcap stocks outperformed, while largecaps also traded firmly higher.
Market nerves clearly eased, with the India VIX sliding nearly 19 per cent, a sign that fear has taken a back seat for now.
On the stock front, InterGlobe Aviation saw a sharp jump of about 9 per cent, while Larsen & Toubro also moved up strongly, gaining over 7 per cent in early trade. Stocks such as Shriram Finance, Adani Ports and Adani Enterprises saw gains of 5–6 per cent. Financial majors Bajaj Finance and Bajaj Finserv, along with Asian Paints and UltraTech Cement, also moved higher.
A major trigger for the rally was the sharp fall in crude oil prices. Brent crude slipped to the mid-$90 range after recently crossing $115, while US crude also declined steeply. Lower oil prices tend to support India’s macro outlook by easing inflation and reducing import pressure.
According to Ponmudi R, CEO of Enrich Money, the easing of geopolitical tensions has played a key role in lifting sentiment.
“Indian equity markets are poised to open higher, supported by an improvement in global sentiment following a marked easing in geopolitical tensions. A temporary two-week ceasefire between the United States and Iran has helped restore risk appetite,” he said, as quoted by ANI.
He added that softer crude prices below the $100 mark provide a strong tailwind for India by supporting inflation control and improving the current account outlook.
Asian markets mirrored the optimism. Japan’s Nikkei surged over 5 per cent, while South Korea’s KOSPI also posted strong gains. Hong Kong’s Hang Seng and Taiwan’s benchmark index traded firmly higher.
Despite the rally, analysts remain cautious about the near-term outlook. Even as markets bounce back, the bigger picture is still a bit shaky. Tensions globally haven’t fully settled, and foreign investors continue to pull money out, which could keep the ups and downs going.
In the previous session, foreign institutional investors (FIIs) sold shares worth more than Rs 8,600 crore. At the same time, domestic institutional investors (DIIs) stepped in and picked up stocks, helping steady the market when it needed support.
Now, the big focus shifts to the Reserve Bank of India’s policy announcement later today. Whatever comes out of that is likely to guide the market’s next move.
Analysts advise a selective approach. “Traders should focus on stock-specific opportunities and buy on dips while maintaining strict risk management. IT, banking and oil-sensitive sectors will remain in focus,” they said.
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