Domestic equities recovered on Wednesday, in line with global markets, after the US hinted at a potential timeline for ending the conflict in Iran, easing concerns over crude oil prices and reviving risk appetite.
Brent crude briefly slipped below the $100-a-barrel mark following the remarks, while global bond prices rallied, further supporting demand for riskier assets.
US President Donald Trump on Tuesday said American forces could withdraw from Iran within “two or three weeks”, adding that the US would end its involvement in the war “whether we have a deal or not”.
Asian and European markets climbed over 2 per cent, tracking overnight gains on Wall Street.
Back home, the benchmark Sensex — which had hit a near two-year low in the previous session — gained as much as 2,017 points, or 2.8 per cent, in intraday trade. However, it surrendered nearly half its gains to close at 73,134, up 1,187 points, or 1.65 per cent.
The Nifty 50 rose 348 points, or 1.56 per cent, to settle at 22,679.
Broader markets outperformed, with the Nifty Smallcap 100 climbing 3.33 per cent and the Nifty Midcap 100 gaining 2.22 per cent. Market breadth remained strong, with gainers outnumbering losers nearly seven to one.
The overall market capitalisation of BSE-listed firms increased by ₹10 trillion to ₹422 trillion.
The rebound follows a sharp selloff in March, when benchmark indices declined 11 per cent — their steepest monthly fall since the pandemic-driven rout of March 2020. The decline was driven by record foreign portfolio investor outflows of ₹1.1 trillion, as the surge in global oil prices dampened India’s economic outlook.
Oil prices have remained above $100 per barrel, as shipments have been unable to pass through the Strait of Hormuz since the start of the conflict, which has now entered its second month.
Analysts said the near-term direction of markets will depend on evolving geopolitical developments and the trajectory of crude oil prices.
“We believe the US will want an off-ramp to the current hostilities, given the massive global impact and losses suffered. Markets will naturally cheer this development, but a structural shift has already occurred — with recent events causing lasting damage to several prospects for this year,” Bernstein said in a note last week.
