Despite the Iran ceasefire announcement providing relief to global markets, foreign institutional investors (FIIs) remained net sellers, offloading shares worth ₹2,054 crore on Wednesday. According to The Economic Times, this continued selling extends a persistent trend seen since the outbreak of hostilities in the region. FIIs have sold nearly ₹1.53 lakh crore over 21 consecutive trading sessions since the Iran war began, reflecting sustained risk aversion toward emerging markets amid geopolitical uncertainty. So far in April, foreign investors have pulled out approximately ₹38,600 crore, underscoring the cautious stance despite improving global sentiment.
The announcement of a two-week ceasefire between the United States, Israel and Iran significantly eased concerns around supply disruptions in global energy markets. As reported by The Economic Times, this development triggered a steep decline in crude oil prices, with Brent crude falling about 14 percent to below $95 per barrel. The decline in crude prices is seen as a key positive for the Indian economy, as lower energy costs help ease inflationary pressures, narrow the current account deficit, support the rupee and strengthen fiscal dynamics. These factors typically improve the macroeconomic outlook and support equity valuations, particularly during periods of global volatility.
Indian equities staged a sharp rebound after the ceasefire announcement, with benchmark indices posting strong gains during the session. According to The Economic Times, the Nifty surged more than 850 points, while the Sensex rose over 2,800 points, gaining roughly 3.8 percent. Broader markets outperformed the benchmarks, with midcap and smallcap indices advancing more than 4.2 percent each, led by strong buying in rate-sensitive sectors such as automobiles and financials, which climbed about 6 percent.
On the policy front, the Reserve Bank of India maintained the repo rate at 5.25% with a neutral stance, ensuring stable liquidity conditions in the financial system. As reported by The Economic Times, while concerns around potential inflation-led rate hikes persist, the current pause in monetary tightening continues to provide support to rate-sensitive sectors, including banks, financials, automobiles, capital goods and infrastructure. Ajay Menon, MD and CEO, Wealth Management at Motilal Oswal, noted that with macroeconomic stability largely in place, market attention is now shifting toward corporate earnings performance, with stock and sector differentiation likely to increase going forward.
Market experts maintain a cautious but optimistic outlook for the near term. According to The Economic Times, Vishnu Kant Upadhyay, AVP – Research at Master Capital Services, suggested that the sharp rally in equities following ceasefire hopes could lead to near-term profit booking after the recent surge. However, he maintained that the broader trend remains constructive and that investors may consider adopting a buy-on-dips approach as markets consolidate after the strong move. The sustainability of the rally will depend on progress in geopolitical negotiations, normalization of energy shipments and the trajectory of crude oil prices, the rupee and foreign investment flows.
