Bulls came to the rescue of the Indian stock market in Thursday’s trade, March 05, after a three-day brutal sell-off that wiped out billions in investor wealth amid fears that intensifying tensions in the Middle East could stoke inflation.
Even though the US-Israel war with Iran still remains heated, the Nifty 50 closed 305 points higher at the 24,785 level, while the Sensex also made a strong rebound, rising 1.27% to 80,122. The broader markets also saw a sharp reversal in sentiment, with the Nifty Midcap 100 and Nifty Smallcap 100 closing over 1.4% higher.
All sectoral indices finished in the green, with Nifty Metal emerging as a standout performer by gaining 2.21%, while the Nifty Consumer Durables index surged 2%.
It was followed by Nifty Auto, Nifty Realty, Nifty Oil and Gas, Nifty Pharma, Nifty Chemicals, and Nifty Media, all closing with gains of over 1%. Nifty IT was the sole loser, falling 0.72% amid the strengthening of the Indian rupee.
Commenting on today’s performance, Hitesh Tailor, Technical Research Analyst at Choice Broking, said, “Despite the surge in crude oil prices and persistent geopolitical tensions in West Asia, today’s market rebound appears largely driven by technical and derivative factors.”
“After the recent sharp correction, benchmark indices had slipped into deeply oversold territory, prompting a relief rally. The cooling in volatility, with India VIX easing from elevated levels, suggests that a significant portion of the geopolitical risk premium had already been priced in during the earlier decline,” he further added.
Additionally, he said that strong domestic institutional buying has helped stabilise the market despite continued FII caution. While elevated crude prices remain a macro headwind for India, the current upmove is largely a technical mean-reversion rally supported by derivatives positioning and selective value buying at lower levels.
(more to come)