Mumbai – Indian stock markets extended their rally on Wednesday, buoyed by positive global cues and a risk-on sentiment following the fragile ceasefire between Israel and Iran. Both benchmark indices, the BSE Sensex and NSE Nifty 50, closed at multi-year highs, reflecting strong investor confidence across sectors.
The Sensex rose by 0.67% to settle near 82,600, while the Nifty 50 crossed the 25,200 mark, marking its highest closing since early 2022. Gains were broad-based as all 13 major sectoral indices ended in positive territory. Mid-cap and small-cap indices also advanced, with gains of approximately 0.5% and 1.3% respectively.
Heavyweight stocks like HDFC Bank and Reliance Industries each added nearly 1%, providing significant support to the rally. Shares of Multi Commodity Exchange surged 4-5% after UBS gave a “buy” rating, while Indiamart soared around 6% following a double upgrade by Nuvama with a target of ₹3,800. Indian Hotels Company also gained over 2% after JPMorgan began coverage with an overweight recommendation. Titan Company advanced 2% due to strong jewellery demand and an increased target price from Macquarie.
The rally was supported by a global uptick, as the MSCI World Index reached a new high amid easing geopolitical tensions. Asian and emerging markets responded positively to the news of a ceasefire between Iran and Israel, which reduced risk aversion among investors.
The Indian rupee strengthened by around 0.2% to ₹85.82 against the U.S. dollar. The Reserve Bank of India conducted a ₹1 trillion variable rate reverse repo auction to absorb excess liquidity, further supporting the rupee. One-year forward premiums increased to 1.94%, up 5 basis points, driven by softer U.S. Treasury yields and the RBI's liquidity management.
Oil prices, which had surged in previous sessions, declined slightly, offering relief to Indian markets that are sensitive to energy import costs. Shares of downstream oil companies such as Indian Oil and BPCL rose, along with InterGlobe Aviation, which benefited from expectations of stable fuel costs. However, upstream firms like ONGC and Oil India faced pressure, falling 2–4% due to lower crude prices.
Gold prices edged up modestly by 0.1%, reflecting continued caution among investors despite improved global risk sentiment. Analysts emphasized that while the truce between Israel and Iran has supported short-term gains, any breakdown could reignite market volatility.
Meanwhile, the Indian primary market is witnessing a wave of activity, with about \$1.75 billion in IPOs and secondary offerings expected this week. Major offerings include HDB Financial Services’ IPO valued at ₹12,500 crore. However, analysts warn that this surge in equity supply could spark profit booking and trigger a near-term correction, especially with current valuations appearing stretched and net foreign investor outflows totaling around \$10 billion year-to-date.
Market experts suggest the near-term momentum may continue if global conditions remain favorable. However, they urge caution, citing geopolitical risks, foreign fund outflows, and the potential overhang of excessive supply from upcoming share sales.
As Indian markets push to new highs, all eyes remain on international developments, particularly in the Middle East, and upcoming corporate earnings that will test the resilience of this ongoing rally.