Markets staged a firm recovery on Wednesday, snapping the previous session’s losses, as easing Middle East tensions dragged crude oil prices lower and optimism around a near-final India-US trade deal buoyed investor confidence.
The BSE Sensex closed at 76,991.22, up 790.54 points or 1.04 per cent, while the Nifty 50 ended at 24,021.65, gaining 197.55 points or 0.83 per cent. The Nifty had opened around 30 points lower but recovered over 300 points from early lows before some profit-booking in the final hour trimmed gains. NSE cash market volumes were 7 per cent lower compared to the previous session.
Banking and IT stocks lead recovery
“Markets rebounded sharply despite mixed global cues, as investors cheered the news of several stranded ships passing through the Strait of Hormuz,” said Ankur Punj, MD & Business Head at Equirus Wealth, adding that the recovery was led by heavy buying in banking and IT stocks.
Banking and IT led the charge. The Bank Nifty surged 966.60 points or 1.69 per cent to close at 58,150.40, aided by the RBI Governor’s comments reinforcing expectations that domestic rate hikes are unlikely in the near term. The Nifty IT index gained around 2 per cent following the recent correction. The Nifty Realty index was the top sectoral performer. Auto and Metal were the only major sectors to close in the red. Among individual stocks, IndiGo, Trent, and Adani Enterprises were top Nifty gainers, while NTPC, Maruti, and Bajaj Auto lagged.
Broader markets and Asian cues mixed
Broader markets also participated, with the Nifty Midcap 100 and Nifty Smallcap 100 posting gains of 0.10 per cent and 0.39 per cent, respectively. Market breadth tilted positive, with the BSE advance-decline ratio at 1.10.
Asian markets, however, presented a mixed picture. South Korea’s Kospi was the standout, surging 3.26 per cent to close at 8,471.02 — a partial recovery from yesterday’s dramatic 10 per cent crash that had rattled regional sentiment. Japan’s Nikkei 225 fell 0.88 per cent to 69,175, and Taiwan’s Weighted Index declined 2.24 per cent to 46,043.60. On the positive side, Hong Kong’s Hang Seng gained 0.33 per cent to 23,412.20, Shanghai Composite edged up 0.11 per cent to 4,110.81, Shenzhen Component rose 1.24 per cent to 16,051.30, and Singapore’s STI added 0.20 per cent to close at 5,215.99.
Rupee gains on crude decline and inflows
On the currency front, the rupee appreciated 7 paise to close at 94.67 against the dollar, supported by the decline in crude prices and sustained foreign inflows. However, a stronger Dollar Index — holding above 101 — continued to cap gains. The rupee is expected to trade in the 94.40–95.00 range, with dollar movement and foreign fund flows remaining the key variables.
Crude eases, gold extends sharp decline
Commodities presented a contrasting picture. Brent crude traded near $71–72 per barrel internationally, while domestic crude futures slipped below ₹6,900, down nearly 2 per cent, on improved vessel movement through the Strait of Hormuz. Gold, meanwhile, continued to slide — COMEX gold fell around 1.3 per cent to approximately $4,068, while domestic prices dropped ₹2,000 to ₹1,44,600. The metal has declined 12 per cent in the June quarter, its steepest fall since December 2016, as investors liquidated bullion to cover losses and margin calls from equity and AI-tech sell-offs globally.
Outlook: focus on oil, trade talks and monsoon
Looking ahead, markets will track crude oil price movement, progress on the India-US trade agreement ahead of the July 24 tariff deadline, the southwest monsoon’s advance, and the outcome of US-Iran negotiations. Siddhartha Khemka, Head of Research at Motilal Oswal, noted that oil-sensitive sectors — OMCs and aviation — and financials, particularly around the RBI’s updated FCNR(B) deposit scheme, are likely to stay in focus. Micron’s upcoming results are also being watched for cues on global technology demand.