Indian equity markets witnessed a dramatic recovery on Wednesday, with the Nifty 50 closing at 24,331, up 298 points or 1.24 per cent, after staging a sharp turnaround from intraday lows. The BSE Sensex ended at 77,958.52, gaining 940.73 points or 1.22 per cent, marking a significant recovery from the day's low of 23,998. According to CNBC TV18, the rally gathered momentum in the latter half of the session with strong buying emerging post 1 pm near the 24,000 mark, lifting the index sharply into the close with the Nifty ending near the day's high. The sharp gains added more than ₹6 lakh crore to the total market capitalisation of all companies listed on the BSE, pulling it up to ₹473 lakh crore.
The market surge was primarily driven by a near 7 per cent slump in Brent crude oil to around $102 per barrel, following reports from Axios that the United States and Iran are close to agreeing on a short memorandum to end hostilities in West Asia. The rally gained momentum from hopes for progress in US-Iran negotiations, which helped ease West Asia tensions and boosted overall market sentiment. The index spent the morning session pinned in a narrow band, with heavy options open interest at the 24,100 Call and 24,000 Put levels keeping participants cautious, before the recovery gained over 275 points from intraday lows. According to latest reports, Trump announced the decision based on the request of Pakistan, which has acted as an intermediary between the US and Iran, though he added that the US blockade of Iranian ports would remain in place. WTI crude dropped over 8 per cent to below $94, marking its steepest two-session fall since the April ceasefire, with the trigger being a report of a pause in escort operations in the Strait of Hormuz.
InterGlobe Aviation emerged as the top Sensex gainer, soaring 6.65 per cent after crude oil prices dropped sharply and the government announced a credit guarantee scheme for airlines impacted by the Middle East conflict. TVS Motor was among the top gainers alongside InterGlobe Aviation. Tata Motors PV gained 5.30 per cent while Shriram Finance rose 4.12 per cent. Other notable gainers included Trent (+3.74%), Asian Paints (+3.67%), SBI (+3.41%), Adani Enterprises (+3.19%), HDFC Bank (+3.14%), and Dr Reddy's (+3.14%). The recovery was broad-based with banking, financials, and realty leading the gains, according to Ajit Mishra, SVP Research at Religare Broking. PSU banks led the gains, followed by financial services stocks, while CPSE and energy indices ended as the top laggards. Sectorally, Realty and Metals led gains, with Pharma adding 2.3 per cent and Chemicals rising 2.4 per cent. The broader markets outperformed the benchmarks, with the Midcap 100 gaining 1.7 per cent and the Smallcap 100 rising 1.9 per cent.
On the policy front, the Union Cabinet approved ECLGS 5.0, a ₹18,100 crore government-backed credit guarantee scheme designed to facilitate nearly ₹2.55 lakh crore in incremental credit for businesses facing liquidity stress linked to the West Asia conflict. The Indian rupee was a significant beneficiary of the day's developments, logging its best single-day gain in nearly a month, appreciating 67 paise to close at 94.61 per US dollar, moving below the 95 mark on softer crude and improved flows. India VIX, the fear gauge, fell sharply by between 5.8 per cent and 6.87 per cent to close around 16.77, signalling a meaningful reduction in near-term anxiety. Jateen Trivedi from LKP Securities noted that 94.70 is likely to act as resistance, while 95.50 is seen as immediate support, with markets closely tracking US non-farm payrolls and unemployment data this week for further direction. Dipti Chitale of Mecklai Financial Services noted that the move was supported by easing geopolitical tensions, reducing oil supply risks, softer crude, foreign inflows and likely RBI dollar sales.
Technically, the Nifty's recovery aligned with its 20-day exponential moving average around 24,028, reinforcing that level as a key near-term support. According to CNBC TV18, Nagaraj Shetti noted that the Nifty is on the verge of breaking above the key resistance level of 24,300, with a sustained move above this could open further upside towards 24,600-24,800, while immediate support is placed at 24,200. Nilesh Jain said the index has established a strong support base around 24,000, aligned with both its 21-day and 50-day moving averages, seeing potential upside towards 24,500 with easing volatility supporting bullish momentum. Rupak De expects near-term upside towards 24,285-24,350, with support at 23,880, noting that although the Nifty has remained below its 50 EMA for eight sessions, indicating a broader weak trend, short-term charts show signs of recovery with higher lows forming. Sudeep Shah from LKP Securities noted that Bank Nifty broke out of its recent consolidation range of 54,222-55,602 and closed above its 20-day EMA for the first time since April 27, supported by strong volumes, with immediate resistance at 56,300-56,400. Market experts remain cautiously optimistic, with Siddhartha Khemka from Motilal Oswal Financial Services noting that the near-term market narrative has shifted meaningfully, though he cautioned that oil dynamics remain unpredictable.
