Indian equity benchmarks Sensex and Nifty posted their strongest single-day gains in years on Wednesday, driven by a US-Iran ceasefire that eased oil prices and inflation fears. The market capitalization of BSE-listed companies rose by ₹16.1 lakh crore. However, Asian stocks turned cautious as the ceasefire showed signs of fragility.
Indian markets surged amid global relief from the US-Iran ceasefire. The Sensex and Nifty recorded their biggest one-day advances in years, as falling oil prices reduced inflation concerns. BSE-listed firms saw their combined market value climb by ₹16.1 lakh crore, according to The Economic Times reports on the rally fueled by the truce in West Asia. Foreign institutional investors remained cautious despite the upswing. Bargain hunters targeted beaten-down stocks in aviation, travel, and oil marketing sectors, which rebounded sharply after the West Asia sell-off. Quality large-cap names in banking, pharmaceuticals, and FMCG also drew stronger interest, as they were less exposed to the conflict. Asian markets, however, grew subdued, with investors wary of the fragile Gulf ceasefire breaking down. Oil prices rose again, highlighting threats to the Strait of Hormuz and signaling persistent inflationary pressures that could sway central bank rate decisions. Overall sentiment stayed cautiously optimistic. Investors monitored fourth-quarter earnings, crude oil movements, and foreign institutional investor flows. Analysts questioned the rally's sustainability, while domestic issues like high valuations, growth slowdowns, weaker rupee, and elevated energy costs pressured corporate profits.
