Mumbai, March 24 – The benchmark stock indices, Sensex and Nifty, rebounded by nearly 2% on Tuesday, driven by a relief rally in Asian markets following US President Donald Trump's announcement of a temporary halt to strikes targeting Iranian energy infrastructure.
The 30-share BSE Sensex rose by 1,372.06 points or 1.89%, closing at 74,068.45. During the day, it surged by 1,793 points or 2.46%, reaching 74,489.39.
The 50-share NSE Nifty climbed by 399.75 points or 1.78%, ending at 22,912.40.
Among the 30 companies in the Sensex, Larsen & Toubro, InterGlobe Aviation, Eternal, Asian Paints, Bajaj Finance, and UltraTech Cement were the top performers.
Power Grid and State Bank of India were the only companies that lagged behind.
Trump announced on social media that he had extended the deadline for Iran to reopen the Strait of Hormuz, a strategically important shipping lane between the Persian Gulf and the Gulf of Oman, and that he would postpone strikes against Iranian energy sites for five days.
"Indian equities witnessed a positive rebound, with markets closing on a positive note after the sharp sell-off in the previous session. The recovery was largely driven by a moderation in risk perception, as early signs of potential de-escalation in the ongoing US-Iran tensions helped restore some investor confidence," said Hariprasad K, Research Analyst and Founder, Livelong Wealth.
He also said that the rally needs to be viewed in context.
"After a sharp, sentiment-driven correction, such rebounds are not uncommon and often reflect a combination of short covering and value buying. Investors typically use such dislocations to accumulate quality stocks at relatively attractive valuations, rather than it being a signal of a structural trend reversal," Hariprasad added.
Asian markets rebounded, with South Korea's benchmark Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index, and Hong Kong's Hang Seng index all closing sharply higher.
European markets traded mostly lower. The US market closed higher on Monday.
"The domestic market witnessed a relief rally following a temporary pause in attacks on Iran's energy infrastructure, which could lead to further easing of tensions in West Asia.
"However, caution persists as investors await greater clarity on the developments around the Strait of Hormuz," said Vinod Nair, Head of Research, Geojit Investments Limited.
Investors' wealth surged by Rs 7.56 lakh crore to Rs 4,22,78,312.77 crore (USD 4.50 trillion).
The BSE MidCap Select index jumped 2.77%, and the SmallCap Select index climbed 2.29%.
All sectoral indices ended higher. Services surged 3.46%, followed by BSE MidSmall Private Banks Quality Tilt (2.99%), industrials (2.98%), Private Banks index (2.63%), consumer durables (2.46%), Bankex (2.40%), consumer discretionary (2.39%), financial services (2.34%), auto (2.30%), and commodities (2.19%).
A total of 2,968 stocks advanced, while 1,295 declined and 168 remained unchanged on the BSE.
"Market sentiment improved as tensions eased regarding the ongoing US-Iran conflict, with crude oil prices dropping more than 11% after US President Donald Trump announced a delay in military actions against Iran. This development helped alleviate fears of potential supply shocks, which had previously weighed heavily on investor sentiment. The market's recovery today can also be attributed to a broader sense of optimism following the massive selloff experienced on Monday," said Gaurav Garg, Research Analyst, Lemonn Markets Desk.
Brent crude, the global oil benchmark, jumped 1.96% to USD 101.9 per barrel.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 10,414.23 crore on Monday, according to exchange data. Domestic Institutional Investors (DIIs), however, bought stocks worth Rs 12,033.97 crore.
On Monday, the 30-share BSE Sensex dived 1,836.57 points or 2.46%, closing at 72,696.39. The Nifty tanked 601.85 points or 2.60%, ending at 22,512.65.