Extending gains for a second straight session, Indian benchmark indices opened sharply higher on Wednesday, rising over 1.5% each, tracking firm global cues amid ongoing efforts to de-escalate the Middle East conflict.

The BSE Sensex reclaimed the key 75,000 mark, rising as much as 1,134 points, or 1.54%, to 75,202. The NSE Nifty climbed 372 points, or 1.6%, to 23,285. In the broader market, the Nifty MidCap and Nifty SmallCap indices advanced around 1.4% each.

Investor wealth also surged, with the market capitalisation of all BSE-listed companies rising by ₹8.6 lakh crore to ₹430.85 lakh crore from ₹422.24 lakh crore in the previous session.

Trent, Adani Ports, Bajaj Finance lead rally

Market breadth remained strong, with 27 of the 30 Sensex constituents trading in the green. Gains were led by Trent, Adani Ports, Bajaj Finance, UltraTech Cement, and M&M, each rising between 2% and 3%.

Financial stocks continued to anchor the rally, with HDFC Bank, Axis Bank, Kotak Mahindra Bank, and Bajaj Finserv posting gains of over 2% each. Buying was also visible in L&T, IndiGo, Tata Steel, and FMCG majors including ITC and Hindustan Unilever.

However, IT stocks lagged the broader market, with Tech Mahindra, Infosys, and TCS trading in the red.

On the sectoral front, the rally was broad-based, with all major indices trading in positive territory. Nifty Realty led the gains, surging nearly 4%, followed by consumer durables and media, which rose around 2.5–3%. Rate-sensitive sectors also saw traction, with private and PSU banks gaining over 1.5–2%. Auto and metal indices climbed more than 2%, while FMCG and pharma posted steady advances. In contrast, the Nifty IT index remained largely flat amid continued selling pressure in select heavyweights.

Mid, small caps to lead rebound, says analyst

Analysts believe mid- and small-cap stocks could outperform large caps in the near term, even as the broader market remains sensitive to global cues and foreign investor flows.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said improving geopolitical signals—particularly indications of de-escalation in the Middle East—have revived market optimism.

“In the near term, mid- and small caps can rebound more than large caps since there is no worry of significant FII selling in this segment,” he said, adding that the recent sharp recovery in the Nifty was largely driven by short covering.

He noted that easing concerns around the Strait of Hormuz and the sharp correction in Brent crude prices to around $98 per barrel are positive for India’s energy outlook. However, he cautioned that the sustainability of the rally will depend on a reversal in persistent foreign institutional investor (FII) outflows and stability in the rupee.

FIIs remain net sellers for the 18th consecutive session

FIIs continued to remain net sellers for the 18th consecutive session on March 24, offloading equities worth over ₹8,000 crore. In contrast, domestic institutional investors (DIIs) provided support, purchasing equities worth ₹5,867 crore.

Aakash Shah, Technical Research Analyst at Choice Equity Broking, recommended a disciplined and selective approach amid heightened volatility. He advised investors to accumulate fundamentally strong stocks during corrections, adding that fresh long positions should be considered only after the Nifty decisively breaks above the 24,500 level, signalling stronger bullish momentum.

Echoing similar views, Ponmudi R, CEO of Enrich Money, said sustained FII selling, driven by global uncertainties, currency fluctuations, and shifting risk appetite, remains a key overhang. He added that the durability of the ongoing recovery will hinge on moderation in these outflows, warning that until then, market gains are likely to remain tentative and sensitive to global developments, particularly crude oil prices, geopolitical tensions, and currency movements.

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