Benchmark equities staged a sharp rebound on Wednesday, with the BSE Sensex soaring 1,823.74 points, or 2.53 per cent, to close at 73,771.29. The Nifty 50 rose 548.60 points, or 2.46 per cent, to settle at 22,880, reclaiming the key 22,800 level.
The rally was broad-based, with strong buying across banking, financial, IT, auto and capital goods stocks, signalling a shift in sentiment after recent weakness.
POSSIBLE WAR DE-ESCALATION
A key trigger for the rally was improving global sentiment amid signs of easing geopolitical tensions.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said, “There are indications of de-escalation of the war from the statements issued by the Iranian authorities. Iranian president’s openness to ending the war and confirmation from the Iranian foreign minister that messages were exchanged with the U.S. indicate that the war might end soon.”
He added, “This view is getting reflected in declines in crude prices and US bond yields. The market might start discounting de-escalation earlier than the event.”
BANKING, FINANCIAL STOCKS REBOUND
Banking and financial stocks, which had seen sharp corrections in recent weeks, led the upmove. Heavyweights such as HDFC Bank, ICICI Bank, State Bank of India and Axis Bank posted strong gains, contributing significantly to index performance.
Vijayakumar noted, “In the March series, the Bank Nifty suffered the worst cut with crash of around 17 per cent. This segment holds the promise of sharp recovery when the market bounces back.”
He further said, “Leading private sector bank has been beaten down on non-fundamental issues. For long-term investors, this presents a buying opportunity.”
The rally was also driven by technical factors following recent market weakness. Several stocks had corrected significantly in previous sessions, prompting value buying at lower levels.
Vijayakumar said, “Many stocks across sectors were marked sharply down on March 30th due to selling triggered by tax harvesting. These stocks are due for a rebound today.”
Short covering likely added further momentum, especially in sectors that had seen aggressive selling. IT stocks such as Infosys, TCS and HCLTech gained between 2 and 3 per cent, while Larsen and Toubro rose strongly among capital goods stocks. Auto names including Mahindra and Mahindra and Maruti Suzuki also advanced, pointing to broad participation across sectors.
The sharp rally indicates improving near-term sentiment driven by global cues, sectoral recovery and technical factors. However, the sustainability of the upmove will depend on further clarity on global developments, interest rate trends and earnings outlook.
– Ends
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