Crude oil prices, which have been volatile amid escalating developments in West Asia, declined by about $10 over two days to $95 a barrel on Wednesday, as optimism grew over a potential second round of talks between the U.S. and Iran to end the month-long conflict. The global benchmark, Brent crude, fell to a low of $93.96 per barrel from $103.87 on Monday, supported by hopes of a revival in U.S.-Iran negotiations.

As per media reports, negotiations are likely to resume with agenda including transit through Strait of Hormuz, international sanctions and nuclear activity.

Boosted by the development, oil sensitive stocks witnessed surge in buying activities today, in sync with strong rally in the broader market, with the Sensex and Nifty rising up to 1.6%. The NIFTY Oil & Gas index emerged as one of the top performers, rising over 2% as crude prices eased, with all constituents trading in the green except Oil India.

Among PSU oil marketing companies, Hindustan Petroleum Corporation surged over 5.5%, while Bharat Petroleum Corporation rose more than 4.4%. Indian Oil Corporation also advanced over 3%. The heavyweight Reliance Industries also climbed around 2%, lending support to the index

City gas and transmission players traded firm, with Gujarat Gas and Gujarat State Petronet gaining around 3%. Adani Total Gas and GAIL (India) rose around 2%, while Indraprastha Gas added nearly 2%.

Among upstream players, Oil India declined over 3%, bucking the trend, while Oil and Natural Gas Corporation saw marginal gains. While Petronet LNG gained over 2.5%. Castrol India remained largely flat.

Aviation stocks also surged, with InterGlobe Aviation rising as much as 5.2%, while SpiceJet hit its 5% upper circuit.

Paint companies saw steady buying interest, led by Asian Paints, which gained around 2.7%, and Berger Paints India, up 2%. Indigo Paints rose over 3.5%, while Kansai Nerolac Paints added around 1.5–2%.

Among smaller players, Shalimar Paints gained about 4%, while Kamdhenu Ventures rose over 5%. Retina Paints advanced more than 2.5%. Grasim Industries, which has exposure to the paints segment, also edged higher.

Tyre stocks mirrored the uptrend, with Apollo Tyres rising over 2.3% and MRF gaining around 2%. JK Tyre & Industries and Goodyear India also advanced over 2%, while CEAT posted moderate gains. Balkrishna Industries edged up marginally.

Meanwhile, the Sensex rose 1,240 points, or 1.6%, to 78,086, after opening higher at 77,981.10 and touching an early high of 78,270.42, compared with the previous close of 76,847.57. Similarly, the Nifty 50 climbed 385 points, around 1.6%, to trade near 24,280 levels, compared to its previous close of 23,842.65.

"Hopes of resumption of U.S.-Iran talks, Israel-Lebanon talks and crash in Brent crude by $10 dollars in two days augur well for the market in the near-term. The resilience of markets worldwide, despite the IMF’s warning about a global recession if the conflict prolongs, is an indication that the market is discounting an end to the conflict soon,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

Broader markets outperformed the benchmarks, with the Nifty Midcap 100 and the Nifty Smallcap 100 advancing up to 1.9%. The sharp upmove comes on the back of positive global cues, particularly easing oil prices and optimism around U.S.-Iran talks, which boosted investor sentiment and triggered broad-based buying across sectors.

Meanwhile, volatility cooled off sharply, with the India VIX declining over 8% to around 18.78, signalling easing market anxiety and improved investor confidence.

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