Benchmark indices ended sharply higher on Wednesday, with the and the Nifty reclaiming the 24,000 mark, as falling crude oil prices, easing interest rate concerns and strong gains in banking and IT stocks lifted investor sentiment.
The S&P BSE climbed 790.54 points, or 1.04%, to close at 76,991.22, while the NSE Nifty50 gained 197.55 points, or 0.83%, to settle at 24,021.65.
The rally came a day after markets had witnessed a sharp correction, with investors returning to risk assets amid improving global cues and expectations that lower oil prices could support India’s growth and inflation outlook.
A key trigger was the continued decline in prices. Brent crude fell 1.53% to $75.90 a barrel, its lowest level since before the Iran conflict, as signs emerged that oil tankers stranded around the Strait of Hormuz were resuming movement.
For India, which imports most of its crude oil requirements, lower oil prices help reduce inflation risks, narrow the current account deficit and improve corporate profitability.
Investor sentiment also received a boost after RBI Governor Sanjay Malhotra indicated that it was premature to discuss rate hikes, suggesting borrowing costs may remain lower for longer. Lower interest rates generally support economic growth, corporate earnings and equity valuations.
Adding to the positive mood were expectations of progress on an India-US trade deal and fresh capital inflows into the debt market following recent policy measures.
Financial stocks were among the biggest contributors to the market’s gains.
Nifty Private Bank rose 1.85%, while Nifty Financial Services gained 1.42%.
Among Sensex constituents, ICICI Bank jumped 2.69%, HDFC Bank gained 2.41%, Axis Bank rose 1.58%, Kotak Mahindra Bank added 1.23% and State Bank of India climbed 1.04%.
Banking stocks received support after the RBI clarified rules allowing banks to extend loans against foreign-currency deposits held by non-resident Indians, improving funding flexibility and boosting expectations around deposit growth.
After coming under pressure in recent sessions, IT shares bounced back strongly.
Nifty IT emerged as the top-performing sectoral index, rising 2.05%.
Tech Mahindra surged 3.25%, Infosys gained 2.61%, TCS advanced 2.36%, while HCLTech added 0.31%.
According to Vinod Nair, Head of Research at Geojit Investments Limited, IT stocks benefited from growing confidence that Indian technology companies will remain crucial partners in enterprise AI adoption despite concerns around global technology spending.
IndiGo was the top Sensex gainer, rising 4.72%, followed by Trent (+3.61%), Tech Mahindra (+3.25%), Bajaj Finance (+2.96%), ICICI Bank (+2.69%) and Infosys (+2.61%).
On the losing side, NTPC fell 2.11%, Tata Steel declined 1.81%, Maruti Suzuki lost 1.60%, BEL dropped 1.48% and Bharti Airtel slipped 1.27%.
While benchmark indices posted strong gains, the broader market underperformed.
The Nifty Midcap 50 rose 0.29%, Nifty Midcap 100 gained just 0.10%, while the Nifty Smallcap 100 added 0.39%.
India VIX, often referred to as the market’s fear gauge, fell nearly 4%, indicating reduced volatility expectations.
Despite the sharp recovery, market participants remain focused on two key factors: the progress of the southwest monsoon and global developments, particularly US monetary policy and geopolitical events in West Asia.
Vinod Nair of Geojit said domestic equities were supported by positive Asian cues, lower crude prices and hopes of an India-US trade deal. He added that large-cap stocks, particularly banks and IT companies, led the rally, while clarity around the FCNR(B) deposit swap scheme helped banking counters attract buying interest.
With crude prices falling more than 16% since the preliminary US-Iran peace agreement and the RBI maintaining a supportive stance, investors are increasingly betting that India’s macroeconomic outlook could improve in the months ahead.
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