In a highly volatile session, India’s equity benchmarks -- the BSE Sensex and NSE Nifty50 -- managed to close with significant gains despite high tensions in West Asia and elevated crude oil prices. The fresh buying, which snapped three sessions of aggressive selling, is primarily attributed to value buying at lower levels and expectations of supply chain easing through the important Strait of Hormuz.
The BSE Sensex rose 938.93 points (1.26%) to close at 75,502.85, while the NSE Nifty 50 gained 257.70 points (1.11%) to settle at 23,408.80. In intraday deals, Sensex fell below the 74,000 level to hit a low of 73,949.76 while Nifty plunged below the 23,000 level to 22,955.25.
Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services, said that despite the recovery, volatility is likely to continue as investors remain cautious amid ongoing geopolitical developments in West Asia and fluctuations in energy prices.
Global equity markets, including India, have come under severe selling pressure, as the US-Israel coalition and Iran continue to exchange blows. Before Monday’s recovery, the Sensex shed nearly 7,700 points in 10 sessions while the Nifty50 had fallen about 2,345 points.
Brent crude prices have surpassed the $100/barrel mark following the disruption in supplies through the Strait of Hormuz and the attacks on oil and gas infrastructure and vessels. Higher oil prices are likely to translate into higher inflation in the coming months, exerting pressure on currency stability and corporate margins, thereby impacting overall equity market sentiment.
“The sentiment (on Monday) remained under pressure during the first half, due to the global oil benchmark rising about 1.7% to $105 per barrel, while tensions escalated after Iran reportedly deployed its advanced Sejjil missile in the ongoing conflict involving the US and Israel. The recovery followed reports that the US is preparing to form a coalition to escort ships through the Strait of Hormuz, easing concerns over disruptions to global energy supplies,” added Khemka.
In addition, two India-flagged LPG carriers, Shivalik and Nanda Devi, successfully crossed the strait carrying about 92,712 metric tons of LPG to India, alleviating supply concerns.
Vinod Nair, Head of Research, Geojit Investments, said that the equity market staged a late-session rebound, supported by value buying in domestically oriented sectors such as auto, banking, and FMCG, a relief rally following the recent sell-off.
“In the near term, investor sentiment will hinge on developments in the Strait of Hormuz, where any easing of supply chain disruptions could provide further support. However, persistently elevated oil prices continue to weigh on broader market direction. Globally, attention remains focused on the upcoming U.S. Fed policy outcome. Rates are widely expected to remain unchanged, reflecting ongoing inflationary pressures and heightened geopolitical uncertainty,” added Nair.
From a macro perspective, India’s wholesale inflation rose to an 11-month high of 2.13% in February, up from 1.81% in January, driven mainly by higher food prices and an increase in manufactured product costs.
Khemka of Motilal Oswal said that inflationary pressures could intensify further if elevated energy prices persist due to the West Asia conflict. Going ahead, markets will closely monitor developments in West Asia, particularly around energy and oil supply disruptions. Updates on the India–United States trade agreement and the upcoming Federal Reserve interest rate decision will also remain key triggers for market direction, he added.