The Indian stock market retreated from its previous rally as renewed tensions in the Middle East cast doubt over a fragile ceasefire, while crude oil prices resumed their upward trend, causing the key indices to snap a five-day winning streak.
The Nifty 50 slipped nearly 1%, giving up some of its recent gains, while the S&P BSE Sensex dropped 1.22% to the 76,615 level. The broader markets, however, outperformed the benchmark indices, with both the Nifty Midcap 100 and Nifty Smallcap 100 indices closing in the green.
Sectoral performance was mixed, as the Nifty Private Bank, Nifty PSU, and Nifty PSU Bank indices closed with losses of over 1%. On the gaining side, the Nifty Metal, Nifty Pharma, and Nifty IT indices posted gains of up to 1.25%.
What came as a major relief for global markets on Wednesday, after US President Donald Trump announced a two-sided ceasefire for two weeks, has now raised questions about the viability of the truce, as Israel continued its strikes on Lebanon.
Iran claimed that Israel violated the terms of the ceasefire by attacking Lebanon, and, in response, Tehran once again closed the Strait of Hormuz after briefly reopening it. Both Israel and the US said that Lebanon was not part of the ceasefire agreement.
On Wednesday morning, following the acceptance of Iran’s conditions by US President Donald Trump and the establishment of a ceasefire, two tankers—having obtained permission from Iran—were able to transit the Strait of Hormuz safely, according to the Fars News Agency.
Midcap, small cap stocks extend rally
Although the key benchmark indices closed in the red, the continued rally in the broader market pushed over 35 Nifty 500 stocks to close with gains of more than 3%.
The list was led by Ola Electric, as the stock was locked in a 20% upper circuit, extending its winning streak to a seventh consecutive session after the company announced that its in-house Lithium Iron Phosphate (LFP) cell is now ready marking a key development in its efforts to build a broader electric mobility and energy ecosystem.
ITI, Meesho, Thermax, and Ather Energy were among the other top performers in trade, rising 11.5%, 8.4%, 7.4%, and 6.4%, respectively. Investors also reacted positively to Honasa Consumer’s Q4 business update, driving the stock up 6.1% to ₹332 apiece.
HFCL closed 5.9% higher at ₹79.6 apiece after the company informed investors that it had secured orders worth ₹1,366 crore. The order is for the supply of optical fiber cables as per customer specifications and is expected to be executed by December 2026.
Zen Technologies, Hitachi Energy India, Angel One, and GE Vernova T&D India also finished the session with gains of over 5%. In the auto space, JBM Auto and Olectra Greentech each gained 4%.
Other stocks such as Belrise Industries, Five-Star Business Finance, Cyient, Hindalco Industries, Kajaria Ceramics, and Waaree Energies all closed with gains of over 3.5%.
(more to come)