Indian stock markets witnessed a dramatic turnaround in afternoon trade on Tuesday, with both benchmark indices posting significant gains. According to ICICI Direct, Sensex jumped 713.97 points or 0.93% to 77,373.64, while Nifty 50 advanced 221.30 points or 0.93% to 24,117.30 as of 13:30 ST. The benchmark indices had declined over 100 points earlier in the day, but sentiment was significantly boosted by reports of Iran proposing a peace initiative to the US aimed at de-escalating ongoing geopolitical tensions. The positive momentum was further supported by steady Q4 earnings updates across sectors.
Oil prices experienced a dramatic surge as a result of rising tensions and expectations of prolonged closure of the Strait of Hormuz. As reported by The Economic Times, Brent crude futures were trading around 1% higher above $109 per barrel on Tuesday morning, after briefly crossing $110 in early trading hours. After comfortably falling below the $100 per barrel mark earlier this month, oil prices soared back above the crucial level last week as fresh attacks near the Strait of Hormuz spooked investors about supply concerns. However, the latest developments suggest that tensions in the Strait of Hormuz remain high after Iran's Revolutionary Guard reportedly boarded two cargo ships near the strategic sea lane, keeping oil prices elevated despite diplomatic overtures.
The diplomatic situation between Iran and the US remains complex, with conflicting signals from both sides. According to The Economic Times, after reports claimed that Iran has given United States a new proposal on reopening of the Strait of Hormuz and ending of the war, US President Donald Trump indicated on Monday that he is inclined to reject the most recent diplomatic overture from Tehran aimed at halting current hostilities. However, sentiment improved as US President Donald Trump on Saturday scrapped plans to send U.S. envoy Steve Witkoff and Jared Kushner to Islamabad, Pakistan, for negotiations with Iran, while Iranian Foreign Minister Abbas Araghchi travelled to Moscow on Monday for talks with Russian President Vladimir Putin. The latest reports suggest that Iran has proposed a peace initiative to the US aimed at de-escalating ongoing geopolitical tensions, which boosted global risk appetite and supported the market recovery.
Despite the decline in benchmark indices earlier in the day, broader markets continued to outperform with strong gains in afternoon trade. As reported by ICICI Direct, BSE 150 MidCap Index jumped 1.51% and BSE 250 SmallCap Index surged 2.02%, significantly outperforming the frontline indices. Market breadth was exceptionally strong with 3,008 shares rising and 1,184 shares falling on the BSE, while 227 shares remained unchanged. The India VIX, which measures volatility expectations, dropped 5.93% to 18.54, indicating reduced market uncertainty despite the earlier decline in benchmark indices.
Sectoral performance showed strong gains with notable individual stock movements leading the recovery. According to ICICI Direct, Sun Pharmaceutical Industries surged 7.18%, Adani Ports and Special Economic Zone gained 2.76%, Wipro rose 2.78%, and JSW Steel advanced 2.48% to emerge as major Nifty50 gainers. On the downside, Shriram Finance declined 4.08%, Axis Bank fell 3.47%, Bharat Electronics dropped 1.83%, Tata Consumer Products fell 0.60%, and Coal India declined 0.48%. Market breadth remained strong with 837 stocks declining while 1,547 advanced and 118 remaining unchanged on NSE, reflecting the broad-based nature of the market recovery.
