Are Bulls Back On D-Street? Defying global uncertainties, the Indian stock market witnessed broad-based buying in intraday trade on Wednesday, even as geopolitical tensions in the Middle East remained
elevated, crude oil prices stayed high, and the rupee remained under pressure.
The Sensex surged over 700 points to an intraday high of 76,775, while the Nifty50 climbed more than 200 points to 23,791. Broader markets outperformed, with mid- and small-cap indices rising up to 2% during the session.
Three-day rally boosts investor wealth
The benchmarks have now extended gains for a third consecutive session. Over this period, the Sensex has rallied more than 2,200 points (around 3%), while the Nifty has gained nearly 650 points (about 3%).
The rally has significantly boosted investor wealth, with the market capitalisation of BSE-listed firms rising to over ₹438 lakh crore, up from around ₹430 lakh crore on Friday — an increase of more than ₹8 lakh crore in just three sessions.
Short covering fuels rebound
A key driver of the rally has been short covering, following the sharp correction triggered by escalating geopolitical tensions.
The recent fall made valuations more attractive, prompting investors to re-enter the market. Blue-chip stocks with strong fundamentals, as well as select mid- and small-cap names, have seen renewed buying interest at lower levels.
Easing fears of prolonged conflict
While the US-Iran conflict continues, markets appear to be factoring in the possibility of limited escalation or an early resolution.
Reports suggest that backchannel communication between the US and Iran may have resumed, raising hopes that the conflict could ease sooner than expected. This has helped improve overall risk sentiment.
Hopes of smoother energy supplies
Sentiment has also been supported by expectations that energy supply disruptions may be temporary.
Reports indicate that India is in discussions to ensure the safe passage of crude and LPG shipments. The possibility of staggered movement of vessels has boosted confidence that supply chains could stabilise in the near term.
Crude oil cools from recent highs
Crude prices have shown some moderation after recent spikes. Brent crude has eased towards the $100 per barrel mark, down from highs of around $119 last week.
Although prices remain elevated, the pullback has helped ease concerns around inflation and growth, offering relief to equity markets.
Value buying and mean reversion at play
The rally also reflects a mean-reversion trend, with markets recovering after the recent sharp decline.
Investors are selectively accumulating stocks with strong earnings visibility, betting that the worst of the recent correction may be behind.
Markets remain cautious despite rebound
Despite the sharp recovery, analysts caution that the situation remains fluid. Any fresh escalation in geopolitical tensions or a renewed spike in crude prices could trigger volatility again.
For now, however, markets appear to be focusing on stability signals and attractive valuations, driving the ongoing rebound.
