Indian equity benchmarks rebounded sharply on Wednesday, with the Sensex jumping 940.73 points or 1.22% to settle at 77,958.52 and Nifty rallying 298.15 points or 1.24% to end at 24,330.95. The strong buying was driven by easing tensions in West Asia after US President Trump indicated progress in peace talks with Iran and paused Project Freedom. According to reports from The Economic Times, the market reacted positively to announcements indicating a potential end to the conflict, with analysts noting that diplomatic signals emerging from the West Asia conflict have turned increasingly constructive. The gains were further supported by an 8% decline in crude oil prices, with Brent crude falling over 2% to $107.56 per barrel and US benchmark West Texas Intermediate (WTI) falling 3% to $99.12 per barrel. In early trading, Sensex rose 0.85% or 657 points to hit an intraday high of 77,675 while Nifty was trading at 24,250, up 0.90% or 217 points.
As reported by The Economic Times, analysts suggest that constructive diplomatic signals, including a possible US-Iran memorandum, could lead to a sustained market re-rating if negotiations continue. The reports indicate that US and Iran are close to agreeing on a one-page memorandum aimed at ending the war, thereby improving global risk sentiment. If negotiations sustain momentum, the prolonged consolidation phase in the Nifty could begin transitioning into a more durable market re-rating. The primary global trigger remains the situation around the Strait of Hormuz, with recent comments from Donald Trump indicating that 'Project Freedom' will be paused temporarily—effectively halting plans to escort vessels through the strait amid ongoing negotiations with Iran. This offers some near-term respite to global markets, though Tehran has not responded to Trump's comments and the US Navy continues its blockade of Iranian ports.
Among sectoral indices, all major sectoral indices on the Nifty advanced, except FMCG, with all sectors trading in positive territory. The broader markets also moved higher, with the Nifty smallcap100 rising 1.93% and Nifty midcap100 gaining 1.76%. Among individual stocks, Hero MotoCorp climbed 2.6% after reporting better-than-estimated profit for the March quarter, aided by strong domestic demand. Mahindra & Mahindra advanced 3.1%, extending gains from the previous session after its fourth-quarter earnings beat estimates. Coforge surged 8.4% following a more than two-fold jump in quarterly profit, while Larsen & Toubro declined 3.4% after reporting a drop in quarterly profit amid the ongoing West Asia situation. In early trading, Nifty PSU Bank, Nifty Private Bank, Nifty Auto, Nifty Metal, and Nifty IT advanced up to nearly 2%, with Larsen & Toubro, Hindustan Unilever, ONGC, Power Grid, and ITC being the top laggards.
According to SBI Securities, the immediate resistance for Nifty is placed in the 24,450-24,500 zone, with any sustainable move above this zone potentially resulting in Nifty extending its pullback towards 24,650, followed by 24,800 in the short term. The immediate support for Nifty is placed in the 24,220-24,200 zone. An expert noted that "technically, the market sentiment is cautiously bullish, but a sustained daily close above 24,250 is needed to extend the rally towards 24,350–24,450. If 23,900 is not held, the index could test the 23,800–23,700 zone." The Union Cabinet on Tuesday approved an emergency credit guarantee programme worth about ₹15,800 crore to help businesses, particularly small firms, facing liquidity stress, which analysts at Nomura describe as a net positive for banks and a modest loan growth tailwind.
The positive momentum extended globally, with Asian markets showing strong gains as the Nikkei rose 0.71% and the Hang Seng jumped over 1%. The KOSPI was up nearly 7%, while on Wall Street, the Sensex had declined 251.61 points or 0.33% to settle at 77,017.79 on Tuesday, with the Nifty falling 86.50 points or 0.36% to end at 24,032.80. India VIX, which measures market fear, fell 7% to settle at 16.68 levels, indicating improved investor sentiment. Foreign portfolio investors net bought shares worth ₹5,834 crore on Tuesday, while DIIs were net buyers at ₹6,836 crore. On global markets, the S&P 500 closed 0.81% higher and the Nasdaq settled up 1%, reflecting optimism driven by oil prices falling for a second consecutive session on hopes that bottled-up West Asia supply could resume flowing.
