Indian equities experienced a relief rally following the announcement of a two-week ceasefire between the US and Iran, with global markets showing renewed optimism. According to latest reports, the S&P 500 closed up 0.62%, Dow Jones gained 0.58%, and Nasdaq 100 rose 0.72% on Thursday, with the S&P 500 posting a 1-month high and Nasdaq 100 reaching a 4-week high. The recovery comes as markets hope that direct negotiations between Israel and Lebanon will begin next week in Washington, with focus on disarming Iran-backed Hezbollah. However, crude oil prices jumped more than 3% as the Strait of Hormuz remains largely blocked, with over 800 vessels trapped in the Persian Gulf and more than 1,000 vessels waiting to transit. The US and Iran both accused each other of violating the ceasefire, with President Trump pledging to keep US troops in the Persian Gulf ahead of Saturday's talks. As per Seeking Alpha, the transits through the Strait of Hormuz remain in the mid single digits a day later, highlighting the fragile nature of the agreement. U.S. crude surged above $100 during the session as it became clear that Iran was still limiting traffic through the Strait of Hormuz, despite the pause in its conflict with the US. Stocks rose Friday with investors still optimistic about the shaky ceasefire ahead of planned weekend talks, though oil prices extended gains over worries Israel's continued attacks on Lebanon could shatter the peace process.
Brokerages have identified approximately 50 stocks across sectors as potential bets for the next phase of the market. As reported by The Economic Times, Kotak Equities highlighted names such as DLF, Godrej Consumer, Info Edge, Aadhar Housing Finance, Eureka Forbes, Jubilant FoodWorks, Coforge, Dixon Technologies and Vishal Mega Mart as beneficiaries of a recovery in consumption and urban demand. Motilal Oswal's picks include large, well-established names such as Bharti Airtel, SBI, ICICI Bank, M&M, Titan, Infosys, IndiGo and BEL, alongside broader plays like Tata Steel, TVS Motor, Indian Hotels, AU Small Finance Bank, Delhivery and Premier Energies. Recent market movements show Brown-Forman closed up 12% on takeover reports, while Whitestone REIT gained 11% after announcing a $1.7 billion merger agreement.
The recommendations span multiple sectors with financials, consumption and industrial cyclicals being favored by various brokerages. According to Elara Securities, the mix includes largecaps such as HDFC Bank, L&T, Maruti Suzuki, Axis Bank and Polycab, along with midcaps like United Spirits, GMR Airports, UNO Minda and IDFC First Bank. Axis Securities and Emkay Global echoed similar themes, favouring Bajaj Finance, Kotak Mahindra Bank, Avenue Supermarts, Nestle India, Kalpataru Projects and Ashok Leyland. UBS identified a blend of defensives and commodity-linked names including Reliance Industries, NTPC, Sun Pharma and Adani Ports as relatively better placed in a volatile oil environment. Recent sector performance shows Marvell Technology up 4% after Barclays upgraded the stock, while software stocks declined 7% on AI disruption concerns after Anthropic launched Claude Managed Agents.
Technical analysis reveals that all four US stock indices are considered to be long-term bullish while they remain above their late March lows, with the next fourteen days being crucial in determining whether the truce develops into something more durable. According to market analysts, Nasdaq 100's top resistance zone comes in at the 11 February 5,382 high, while S&P 500's 6,740-to-6,618 range is expected to at least partially fill. The Dow Jones Industrial Average shot up as far as slightly above its 50% retracement of the February-to-April decline at 47,788, with the Russell 2000 seeing a strong rally take it close to the upper edge of its resistance area at the 4 March 2,644 high. Despite the relief rally, oil remains 40% above pre-conflict levels with Brent rising back to above $95 per barrel and WTI to above $97, while silver has lagged the wider recovery reflecting the unwinding of leveraged positions built during its earlier rally. The Dow jumped 1,300 points for its best day since April 2025 on Thursday, extending the rally as investors remained optimistic about the fragile ceasefire.
The current environment reflects a shift from panic-driven selling to selective positioning, with the recent correction creating opportunities in companies with strong balance sheets, pricing power and domestic demand exposure. As reported by The Economic Times, Nomura advised maintaining balanced portfolios amid binary risks, noting that markets are now pricing in rapid swings between escalation and de-escalation scenarios. According to Seeking Alpha, the mid-term elections are approaching, which could influence the conflict resolution timeline, while the US no longer has much leverage over the Strait. The broader takeaway is that while the ceasefire has reduced immediate downside risks, markets are still trading with a geopolitical risk premium, with oil remaining the key variable influencing inflation, interest rates and corporate margins. ECB Governing Council member Olaf Sleijpen warned that persistently high oil prices will amplify inflationary effects, while swaps are discounting a 25% chance of a 25 bp ECB rate hike at the April 30 policy meeting. Until global risk sentiment stabilises, stock-specific opportunities are likely to dominate over broad-based rallies.
