Global relief wave lifts Indian markets, but FIIs stay cautious

Synopsis

Indian equity indices surged significantly on Wednesday, with the Sensex and Nifty experiencing their strongest single-day gains in years. This rally was fueled by relief over a US-Iran ceasefire, leading to a drop in oil prices and easing inflation concerns. The market capitalization of BSE-listed companies increased by ₹16.1 lakh crore.

Mumbai: India's equity indices shot up 4% - marking the highest single-day gain by the Sensex in five years and the strongest rally by the Nifty in 11 months - swept up in the wave of relief that propelled financial markets across the world on Wednesday after the US-Iran ceasefire was announced.

The rupee strengthened and government bond yields eased. Gold and silver rose. The two-week pause in West Asia hostilities, which paves the way for the reopening of the Strait of Hormuz, sent oil prices tumbling 15%, easing concerns that higher energy prices could stoke inflation and derail growth.

The NSE Nifty ended at 23,997.35, up 3.8% or 873.70 points over the previous day. The BSE Sensex finished at 77,562.90, up 4% or 2,946.32 points. The surge - the biggest upmove in a day by the Sensex since February 2021 and since May 2025 for the Nifty - was partly driven by liquidation of bearish bets.

Agencies

Adding ₹16 Lakh Crore to Mcap

These had weighed down the market since the start of the war February 28, dragging it into the oversold zone.

"The ceasefire has come as a relief to investors as it rekindled hopes of the war coming to an end sooner, and drove them to cut bearish positions," said A Balasubramanian, MD and CEO, Aditya Birla Sun Life AMC. "Although this is a step in the right direction, investor confidence is likely to be bolstered once a formal agreement is reached between the sparring nations."

Wednesday's gains added ₹16.1 lakh crore to the market cap of BSE-listed companies.

The ceasefire was announced early Wednesday morning India time. Still, foreign portfolio investors remained net sellers, pulling out a net ₹2,811.97 crore from Indian equities. That took their total sales tally for April to ₹48,317 crore. Domestic institutions brought to the tune of ₹4,168.17 crore.

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