Markets rebound as oil prices ease; Nifty gains 1%, Vix drops 19%

Sensex jumped 640 points and Nifty rose 1% after easing crude oil prices and hopes of de-escalation in the Iran conflict lifted sentiment, even as volatility remains elevated.

A day after falling to a 10-month low, domestic equ­ity markets rebounded on Tuesday on the back of easing crude oil prices and hopes that the Iran conflict may be neari­ng an end.

 

The benchmark Sensex ended at 78,206, up 640 points or 0.8 per cent, while the Nifty 50 settled at 24,262, gaining 234 points or 1 per cent. The total mcap of BSE-listed companies increased by nearly ₹6 trillion to ₹447 trillion.   Investor sentiment improved after US President Donald Trump indicated that the military operation in Iran was progressing ahead of his earlier four-to-five-week timeline and suggested he may be open to talks with Tehran.

 

 

Brent crude prices eased to around $90 per barrel, after surging to $116.8 a barrel on Monday amid supply cuts by major producers and fears of shipping disruptions as tensions escalated between the US-Israel alliance and Iran. The Strait of Hormuz, which handles nearly a fifth of global oil supply, has effectively been shut, heightening concerns for major importers such as India.

 

Asian markets also advanced as the decline in oil prices eased concerns around inflation and economic disruption. 

 

The India VIX, a gauge of market volatility, fell 19.08 per cent to 18.9. Despite the sharp decline on Tuesday, the fear gauge remains elevated after a surge over the past month driven by geopolitical tensions and oil price swings.

 

Market gains were broad-based. The Nifty Midcap 100 rose 1.6 per cent, while the Nifty Smallcap 100 gained 2.1 per cent. Market breadth was strong, with 3,053 stocks advancing on the BSE against 1,231 declining.

 

Among index heavyweights, ICICI Bank, up 2.7 per cent, contributed the most to the Sensex gains, followed by HDFC Bank, which rose 1.2 per cent.

 

“Dalal Street mirrored the improvement in global sentiment after the sharp decline in crude oil prices following comments from Trump hinting at a possible end to the war. However, elevated levels of India VIX continued to signal underlying uncertainty,” said Vinod Nair, head of Research at Geojit Investments.

 

Nair added: “In the near term, markets are likely to remain cautious, with investors closely monitoring signs of geopolitical de-escalation. Greater clarity could trigger value buying in sectors most affected by recent volatility.”

 

Technically, analysts see resistance ahead. “The 24,370-24,400 zone will act as an important hurdle for the index. A sustained move above 24,400 could extend the pullback rally towards 24,650, while the 24,160-24,130 zone will act as immediate support,” said Sudeep Shah, head (technical and derivatives research) at SBI Securities.

 

Market participants are likely to remain focused on developments in West Asia and movements in crude oil prices, while global macro cues continue to shape risk sentiment.