Equity markets reversed early losses and surged in afternoon trade after a sharp fall in crude prices following reports of a possible US-Iran framework deal to end the war.

Benchmark indices staged a strong intraday recovery on Wednesday, with the Sensex rising 958.11 points to 77,975.90 and the Nifty gaining 300.35 points to 24,333.15 as of 2:52 pm.

From early weakness to sharp reversal

Markets opened on a cautious note amid global uncertainty, with the Nifty slipping to an intraday low of 23,997.90 after opening at 24,171. However, sentiment turned decisively positive in afternoon trade following reports of a potential breakthrough in US-Iran negotiations.

According to a report by Axios, the United States and Iran are closing in on a one-page memorandum of understanding (MOU) aimed at ending the war and setting a framework for future negotiations.

The proposed deal includes around 14 points and is being negotiated by US envoys and Iranian officials.

Key elements under discussion include:

• A moratorium on uranium enrichment, currently being negotiated in the 12–15 year range, though the US has pushed for a longer duration

Other reports indicate the deal could also involve lifting sanctions, releasing frozen Iranian funds and easing restrictions on shipping through the Strait of Hormuz, a critical global oil route.

Importantly, no final agreement has been signed yet, and internal divisions within Iran remain a key risk to closure.

Oil crash triggers macro relief rally

The report triggered a sharp reaction in global oil markets.

Brent crude dropped more than 5% to $103.09, while WTI crude fell over 6% to around $95.6.

For India, which imports over 80% of its crude requirements, the fall in oil prices is a major macro positive. Lower crude prices ease inflationary pressures, reduce the current account deficit and improve fiscal dynamics.

Broad-based buying across sectors

The easing in oil prices sparked buying across rate-sensitive and domestic sectors, including financials, realty, pharma and auto stocks. Broader markets also saw strong participation, indicating improved risk appetite.

IndiGo surges on fuel cost relief

Shares of InterGlobe Aviation and SpiceJet surged after the government approved a credit line guarantee scheme for airlines, easing liquidity concerns for the sector. The move, which provides sovereign-backed funding support, is seen as a key relief measure for carriers hit by elevated fuel costs and disruptions linked to the West Asia conflict.

Oil-linked stocks under pressure

In contrast, upstream oil companies declined on expectations of lower realisations following the fall in crude prices. Shares of Oil and Natural Gas Corporation fell 2.64%, while Reliance Industries and Larsen & Toubro also traded lower.