India’s stock market registered a sharp recovery today, after US President Donald Trump said the Iran war “is close to over”.
The 30-share S&P BSE Sensex rose 1.85%, or 1,422.85 points, to an intraday high of 78,270.42 points, even as the wider NSE Nifty 50 tested 24,300 levels. Only three Nifty 50 stocks were in the red, with Dr. Reddy’s Laboratories emerging as the biggest loser and InterGlobe Aviation Ltd. (IndiGo) top gainer.
The primary catalyst for the optimism is a sharp decline in energy costs. Brent crude fell 1.2% to $94.27 a barrel, while WTI dropped toward $90. Softening crude oil prices come amid reports that diplomatic channels between the US and Iran may be reopening, potentially averting a broader conflict that threatened to disrupt supply routes in the Strait of Hormuz.
US President Donald Trump told Fox News that the war is “close to over”, hinting at a second round of face-to-face talks with Iran in Pakistan in the coming days.
For India, which imports more than 80% of its crude requirements, the price drop serves as a relief: it narrows the current account deficit and cools inflationary pressures. Shares of state-run oil marketing companies, including Indian Oil Corp. Ltd., Bharat Petroleum Corp. Ltd. (BPCL) and Hindustan Petroleum Corp. Ltd. (HPCL), will be in focus after underperforming earlier this week.
Global Tailwinds
The MSCI Asia Pacific Index climbed to a six-week high Wednesday morning, fuelled by a constructive lead from Wall Street where investors pivoted back to growth stocks.
“The cooling of geopolitical temperatures is the immediate trigger the market was looking for,” said market analysts tracked by Reuters. “With oil prices stabilising, the focus for Indian investors will shift back to domestic macros and the ongoing corporate earnings season.”
Earnings and Sector Moves
Investors are also parsing a heavy slate of fourth-quarter earnings.
ICICI Prudential Life Insurance Co. Ltd. is expected to see active trading after reporting a 10% year-on-year increase in net profit, signaling resilience in the private insurance sector despite shifting tax regulations.
Aviation stocks, led by InterGlobe Aviation Ltd. (IndiGo), are likely to gain as the drop in crude lowers the cost of aviation turbine fuel, which typically accounts for nearly 40% of an airline’s operating expenses.
Conversely, defence public sector undertakings like Hindustan Aeronautics Ltd. remain on the radar as traders weigh a massive fourth-quarter order book against high valuation multiples.
“In the extremely volatile scenario through which markets have been moving, it is important that investors remain invested,” V.K. Vijayakumar, chief investment strategist at Geojit Investments Ltd., said over an email. “The benefit from sharp rebounds in the market will be lost to investors who sell out and keep away from the market.”
Technical Outlook
Technical analysts cited by Livemint suggest the Nifty 50 faces its first major overhead resistance at the 24,200 level. A sustained close above this threshold would be required to confirm that the recent correction has bottomed out. On the downside, the 23,850 level remains a crucial support zone.
Foreign Institutional Investors (FIIs) remained net sellers in the previous session, offloading shares worth approximately ₹2,500 crore. Whether today’s global shift toward “risk-on” sentiment can reverse this trend will be a key theme for today’s trading session.
