Benchmark equity indices Sensex and Nifty staged a strong recovery on Wednesday, gaining nearly 1 per cent each, driven by easing crude oil prices and robust buying in banking, financial and information technology stocks.
Investor sentiment was further boosted by growing optimism surrounding a potential India-US trade agreement and the return of foreign institutional investors as net buyers in the domestic market, market participants said. The 30-share BSE Sensex rallied 790.54 points, or 1.04 per cent, to close at 76,991.22. During intraday trade, the index surged as much as 989.69 points, or 1.29 per cent, to touch 77,190.37.
Market breadth remained positive, with 2,215 stocks advancing on the BSE, while 2,034 declined and 181 remained unchanged. The broader NSE Nifty50 climbed 197.55 points, or 0.83 per cent, to settle at 24,021.65, recovering a substantial portion of the losses suffered in the previous trading session.
According to Vinod Nair, Head of Research at Geojit Investments Limited, domestic equities finished firmly in positive territory, supported by favourable cues from Asian markets and a decline in crude oil prices amid improving shipping movement through the Strait of Hormuz. Expectations of a near-term trade agreement between India and the United States also contributed to the upbeat sentiment.
Among Sensex constituents, InterGlobe Aviation, Trent, Tech Mahindra, Bajaj Finance, ICICI Bank, Infosys, HDFC Bank and Tata Consultancy Services emerged as the top gainers, benefiting from strong buying interest.
On the other hand, NTPC, Tata Steel, Maruti Suzuki India and Bharat Electronics ended the session in the red and were among the major laggards. The broader market also witnessed moderate gains. The BSE SmallCap Select Index advanced 0.44 per cent, while the MidCap Select Index rose 0.32 per cent.
Sector-wise, banking and financial stocks led the rally. The BSE Private Banks Index jumped 2.21 per cent, followed by Realty at 2.17 per cent, Services at 2.14 per cent, IT at 1.81 per cent, Bankex at 1.78 per cent, Focused IT at 1.68 per cent and MidSmall Private Banks Quality Tilt at 1.64 per cent.
However, some sectors underperformed. Industrials, Telecommunications, Utilities and Power stocks ended with limited gains or remained under pressure compared to the broader market.
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Vikram Kasat, Head Advisory at PL Capital, said the rally was largely driven by the decline in global crude oil prices amid easing concerns over tensions involving the United States and Iran. Expectations of uninterrupted energy supplies through the Strait of Hormuz, combined with sustained foreign fund inflows and strength in banking and technology shares, helped support the market's upward momentum.
Global oil prices remained under pressure, with Brent crude, the international benchmark, declining 1.69 per cent to USD 75.78 per barrel. Foreign Institutional Investors (FIIs) turned net buyers on Tuesday, purchasing equities worth Rs 17.86 crore, according to exchange data.
Investor confidence also received a boost after a senior US official stated that Washington and New Delhi were "very, very close" to finalising a landmark bilateral trade agreement. The proposed deal is expected to improve market access for American products while strengthening economic ties between the two countries.
Ponmudi R, CEO of online trading and wealth-tech platform Enrich Money, said Indian markets rebounded sharply from Tuesday's sell-off, aided by gains in banking stocks and a recovery in the IT sector. He noted that easing geopolitical tensions in the Middle East and falling crude oil prices had revived risk appetite among investors.
Across Asia, South Korea's Kospi index surged more than 3 per cent after suffering steep losses in the previous session. China's Shanghai SSE Composite and Hong Kong's Hang Seng Index also ended higher, while Japan's Nikkei 225 closed marginally lower.
European markets traded on a mixed note during afternoon deals. In contrast, US markets had ended sharply lower overnight. The Nasdaq Composite declined 2.21 per cent, while the S&P 500 lost 1.44 per cent. The gains on Wednesday came after a sharp correction in the previous session. On Tuesday, the Sensex had plunged 893.39 points, or 1.16 per cent, to close at 76,200.68, while the Nifty had dropped 278.80 points, or 1.16 per cent, to settle at 23,824.10.
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