The NIFTY50 has staged a sharp rebound, rising nearly 4.5% in 5 sessions following the easing of geopolitical tensions in West Asia following the US-Iran truce agreement. The NIFTY50 closed at 24,013.10, up 390 points or 1.65%, and the SENSEX gained 1.7% on a weekly basis on Wednesday, June 17. According to latest reports, the benchmark indices showed resilience throughout the session, with the NIFTY50 advancing for the fourth consecutive session and gaining nearly 5% over the last four trading sessions. The positive momentum was supported by Brent crude prices falling from above US$95 per barrel during the conflict phase to around US$78-79 per barrel currently, representing a drop of nearly 15-20% in less than two weeks.
Trent, Eternal, and Tech Mahindra emerged as the top gainers during the session, as reported by market data. The Bank Nifty extended its rally for a fifth straight session, ending 0.50% higher, while IDBI Bank shares jumped 17.12% after the Reserve Bank of India cleared bidders involved in the bank's strategic disinvestment process. Dixon Technologies surged 4.89% on expectations that the government may approve the company's long-pending joint venture with Vivo later this month. The biggest contributors to the NIFTY50's gains were Bharti Airtel, which added 15.04 points, followed by Trent with 14.80 points and Infosys with 10.77 points.
The decline in Brent crude prices following the US-Iran peace deal has provided significant relief to India, one of the world's largest crude importers. According to market experts, Brent crude has fallen from above US$95 per barrel during the conflict phase to around US$78-79 per barrel currently, representing a substantial drop in less than two weeks. This 15-20% decline in crude prices helps reduce India's import bill, ease inflationary pressures, support the rupee and provide greater fiscal flexibility. The Indian currency has already responded positively, appreciating nearly 1% against the US dollar during the week amid falling oil prices and improving risk appetite. The broader market rally has also been supported by a decline in volatility, with India VIX falling to around 13, indicating reduced risk aversion and improving investor confidence.
Sectoral performance showed mixed results with the Nifty PSU Bank and Nifty Consumer Durables indices leading gains, while the Nifty Realty and Nifty Auto indices were the biggest laggards. According to market data, seven of the eleven major indices ended in positive territory, with the Nifty MidCap index rising 0.47% and the Nifty SmallCap index gaining 0.68%. The market breadth has improved significantly, with mid-cap and small-cap stocks participating in the rally alongside large-cap counters. The India VIX, the market's fear gauge, declined nearly 1.30% to hit a fresh three-month low, indicating reduced market volatility.
Analysts believe the NIFTY50 could reach 25,000 in June if certain conditions remain supportive, though some consolidation may occur amid earnings expectations. According to Vinit Bolinjkar, Head of Research at Ventura, the benchmark index requires only ~3.8% upside from current levels (~24,100) to reach 25,000. He identified three key conditions: 1. Brent crude sustains below US$80/bbl, 2. FII flows continue to improve as macro concerns ease, and 3. Q1FY27 earnings commentary remains constructive. However, he cautioned that after the sharp recovery, some consolidation cannot be ruled out in the near term as markets have already priced in a large portion of the geopolitical relief. Technical indicators have improved considerably with the index reclaiming key short-term moving averages and momentum oscillators turning positive.
