Sensex Jumps 1,000+ Points Amid Easing Geopolitical Tensions

Indian equities experienced a strong rebound on Friday after three consecutive days of decline, driven by indications of easing of Middle East geopolitical tensions that improved investor mood across the board.

Investor sentiment was supported after the United States showed willingness to negotiate diplatically with Iran and stated that a decision on support for Israel in the military domain would be taken within two weeks.

This change in tone eased fears of immediate escalation in the region and sparked a broad-based rally on Dalal Street.

Both benchmark indices started on a robust note and were able to maintain their momentum for the day. The BSE Sensex jumped 1,046 points, or 1.29%, to 82,408.17, after going as high as 82,488.21 intra-day. The NSE Nifty also had strong gains, up 319.95 points or 1.29% to close the day at 25,112.4.

Referring to the performance of the day, Vinod Nair, Head of Research, Geojit Financial Services, said, "The national equity indices rose with Middle East tension easing with risk of instant military actions diminished as US talks to Iran are likely to take place."

He added that the fall in crude oil prices also had its role in the rally, making the environment more conducive for Indian equities and bolstering foreign investor sentiment.

Among the constituents of Sensex, Bharti Airtel was the top gainer with a 3.27% increase, and only Maruti Suzuki India was in the negative. Other gainers were Mahindra & Mahindra, Power Grid Corporation, and Nestle India.

Broader markets also followed the positive tone. Nifty Midcap 100 index increased by 1.46%, and Nifty Smallcap 100 rose 1.01%, indicating robust participation outside of large caps.

All NSE sectoral indices closed the session in the green. At the forefront was the Nifty Realty index, which climbed by 2.11%. The banking counters also saw strong buying interest, and Bank Nifty, Nifty PSU Bank, and Nifty Private Bank indices each rose over 1%.

Economic heavyweights like Financial Services, Metals, Automobiles, and Healthcare also saw gains in excess of 1%, adding to the positive breadth of the day.

Sundar Kewat, at Ashika Institutional Equity, encapsulated the market sentiment by stating, "The overall sentiment remains positive with sustained buying across sectors and firm participation in the broader market."

Volatility in the markets persisted to go down, with the India VIX—a measure of anticipated market volatility—dropping 4.08% to 13.67, which indicates lower uncertainty among traders.

Concurrently, the Indian rupee gained 0.15 to close at 86.57 against the US currency. The advances were underpinned by easing crude prices and a weaker dollar index.

"Sustained FII and DII flows into Indian markets have helped contain the rupee's decline despite the sustained geopolitical tensions in recent months," stated Jateen Trivedi, Analyst, LKP Securities.