Sensex jumps nearly 1,400 points, Nifty tops 23,500 as easing Middle East tensions, lower crude lift sentiment

Indian equity benchmarks rallied sharply in afternoon trade on Thursday, supported by a decline in crude oil prices, easing concerns over the Middle East conflict and strong buying in banking and financial stocks.

At 2:36 pm, the BSE Sensex was up 1,397.13 points, or 1.89%, at 75,229.67, while the NSE Nifty 50 gained 377 points, or 1.63%, to 23,538.55.

Investor sentiment improved after reports suggested a potential diplomatic breakthrough in the Israel-Iran conflict, leading to a more than 4% dip in crude oil prices. Brent was trading around $83 per barrel during mid-day. Lower oil prices are seen as positive for India, which imports more than 85% of its crude oil requirements, as they help ease inflationary pressures and improve the country's fiscal and current account balances.

The rally was further aided by optimism surrounding the Reserve Bank of India's recent measures to boost foreign investment in government securities and attract capital inflows.

Financials lead broad-based gains

Banking and financial stocks spearheaded the advance, with the Nifty Bank index rising 2.61% and the Nifty Financial Services index gaining 2.71%.

Shriram Finance topped the Nifty gainers list, climbing 6% to ₹939.45. IndusInd Bank advanced 4.54% to ₹4,706.60, while Bajaj Finance rose 4.22% to ₹907.25.

Larsen & Toubro gained 4.05% to ₹4,018.60, HDFC Bank added 3.46% to ₹770.40 and Jio Financial Services rose 2.98% to ₹234.82.

Other prominent gainers included Kotak Mahindra Bank, Titan Company, Axis Bank, Bajaj Finserv, UltraTech Cement and Maruti Suzuki India.

Midcaps, smallcaps outperform

The rally extended beyond benchmark stocks, indicating broad-based participation.

The Nifty Midcap 100 index rose 2.01%, while the Nifty Smallcap 100 advanced 2.47%. The Nifty Smallcap 250 and Nifty Microcap 250 gained 2.30% and 2.71%, respectively.

Market volatility also eased, with India VIX falling 4.51% to 14.91.

FMCG, energy stocks under pressure

Among the laggards, Nestle India fell 2.92% to ₹1,381, while ONGC declined 2.85% to ₹245.40 as crude prices retreated. Tech Mahindra slipped 2.45% to ₹1,429.20.

Power Grid Corporation, SBI Life Insurance, Tata Consumer Products and Coal India also traded lower.

The strong advance in financials, coupled with gains across midcap and smallcap segments, suggested investors were rotating back into risk assets after recent volatility triggered by geopolitical concerns and elevated oil prices.