Sensex Posts 450-Point Gain as Nifty Nears 24,200 Amid Optimism Over US-Iran Peace Deal

Indian Stock Market Rebounds on Strong Buying in Banking Shares and Easing Geopolitical Tensions

The benchmark indices Sensex and Nifty rebounded on Wednesday, driven by robust buying in banking shares and a decline in crude oil prices, amid hopes of progress in US-Iran negotiations. Positive global cues also lifted investor sentiment.

Market Performance

In early trade on Wednesday, the Sensex rose by 448.35 points or 0.58 percent to 77,466.14 at around 9:30 am. The Nifty gained 153.05 points or 0.65 percent to 24,185.85. In contrast, the Sensex had declined by 251.61 points or 0.33 percent to settle at 77,017.79 on Tuesday, while the Nifty fell by 86.50 points or 0.36 percent to end at 24,032.80.

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All major sectoral indices on the Nifty advanced, except for the FMCG sector. The broader markets also moved higher, with the Nifty smallcap100 and Nifty midcap100 rising by 0.9 percent and 1.1 percent, respectively.

Individual Stock Performances

Among individual stocks, Hero MotoCorp climbed by 2.6 percent after reporting better-than-estimated profit for the March quarter, aided by strong domestic demand. Mahindra & Mahindra advanced by 3.1 percent, extending gains from the previous session after its fourth-quarter earnings beat estimates. Coforge surged by 8.4 percent following a more than two-fold jump in quarterly profit, while Larsen & Toubro declined by 3.4 percent after reporting a drop in quarterly profit amid the ongoing West Asia conflict.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Banking Sector Leads Gains

Sharp buying in bank shares led the gains after the government approved a credit guarantee scheme to support businesses impacted by the Iran conflict. The Bank Nifty rose by more than 1 percent, while the Nifty Private Bank index gained 1 percent and the Nifty PSU Bank index advanced 1.6 percent.

The Union Cabinet on Tuesday approved an emergency credit guarantee programme worth about Rs 15,800 crore to help businesses, particularly small firms, facing liquidity stress. Analysts at Nomura noted that the scheme is a net positive for banks, providing a modest loan growth tailwind and a more meaningful near-term asset quality buffer.

Easing Geopolitical Concerns

Investor sentiment was supported by hopes of a possible easing of tensions between the US and Iran. US President Donald Trump has suspended "Project Freedom," to escort ships through the Strait of Hormuz, claiming progress in negotiations with Iran toward an agreement to end the war. Trump's statement on Truth Social came hours after US Secretary of State Marco Rubio announced that Operation Epic Fury, launched on February 28, had concluded as its objectives have been achieved.

Decline in Crude Prices

Crude oil prices declined, with Brent crude falling 1.67 percent to around USD 108 per barrel, after trading near USD 115 earlier this week. Lower oil prices are seen as supportive for equity markets and the domestic currency.

Firm Global Cues

Asian markets, including South Korea's Kospi and Hong Kong's Hang Seng, traded higher, while US markets settled in positive territory on Tuesday. The India VIX, a measure of market volatility, declined more than 2 percent to 17.50, indicating easing investor concerns and improved risk appetite. The rupee appreciated by 23 paise to 94.95 against the US dollar, tracking the decline in crude oil prices and easing geopolitical tensions.