Indian markets started FY27 on a strong note but gave up a portion of gains due to profit booking, highlighting fragile sentiment.
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Equities ended up on April 1, starting the fiscal year on a positive note, following global cues on hopes that the war in West Asia would end soon.
The Nifty 50 settled at 22,679.40, up 1.56 per cent, and the BSE Sensex ended 1.65 per cent higher at at 73,134.32
Both the benchmark indices were trading well over 2 per cent in early trades, but were unable to sustain the momentum, with profit booking coming in at higher levels.
Index heavyweights Reliance Industries and HDFC Bank rose 1.9 per cent and 1.5 per cent. Larsen & Toubro ended 3 per cent higher.
President Donald Trump’s remarks that the United States could withdraw from Iran “whether we have a deal or not” within the next two to three weeks delivered the catalyst that markets had been waiting for.
“The early rally was largely sentiment-driven, reflecting optimism around easing geopolitical tensions. However, the inability to sustain higher levels suggests that underlying conviction remains limited,” said Hariprasad K, SEBI-registered Research Analyst and Founder, Livelong Wealth.
The RBI decision to defer the norms on banks’ capital market exposure to July, also perked up sentiments.
Sectorally, the rally was broad but uneven.
Defence emerged as the session’s standout performer, rising close to 5 per cent after Trump openly criticised European allies, reinforcing India’s strategic positioning. Capital markets gained 4.62 per cent, media, PSU banks, and chemicals each gained roughly 4 per cent. The lone laggard was pharma, which slipped over 1 per cent, with Dr Reddy’s down 3.8 per cent and HDFC Life off 3.1 per cent. Trent and IndiGo were the top individual gainers, surging 6.9 per cent and 6.1 per cent respectively.
Broader markets outperformed the frontline. The Smallcap index climbed 3.4 per cent — its strongest close since May 12, 2025 — while midcaps added 2.2 per cent, though both indices showed similar intraday patterns of gap-up openings followed by profit booking.
India VIX eased 10.3 per cent to close at 25.01, offering some relief on the volatility front, though analysts cautioned the reading still reflected elevated uncertainty. In the derivatives market, significant call writing was noted at the 22,800 and 22,900 strikes, suggesting the street views this zone as near-term resistance.
For Bank Nifty, the session was similarly indecisive. The index opened with a gap of 1,158 points at 51,434, dipped to 51,134 before recovering, and closed at 51,449, up 2.33 per cent.
“The short-term trend of the market is still on the weaker side,” said Shrikant Chouhan, Head Equity Research, Kotak Securities, adding that due to temporary oversold conditions, there could be a pull-back rally from current levels.
Published on April 1, 2026
