Markets soar as crude tumbles on US-Iran breakthrough signals; Nifty reclaims 24,300

Equity markets ended Wednesday higher after staging a sharp mid-day recovery from early losses, supported by a steep fall in crude prices and policy relief for airlines, while broad-based buying lifted most sectors.

The benchmarks reversed early losses, on the back of easing global tensions and a sharp correction in crude oil prices.

The 30-share S&P BSE Sensex rose 940.73 points, or 1.22%, to close at 77,958.52, while the broader NSE Nifty 50 gained 298.15 points, or 1.24%, to settle at 24,330.95.

From early weakness to strong close

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 on reports of progress in US-Iran negotiations.

A report by Axios said the two countries are closing in on a one-page memorandum aimed at ending the conflict and laying the groundwork for further nuclear negotiations.

The development triggered a sharp drop in crude prices and lifted global risk appetite, with equities rallying across markets.

Vinod Nair, head of research, Geojit Investments Limited, said, "Domestic markets rallied on a risk-on sentiment, driven by easing US–Iran tensions and China’s diplomatic engagement, which helped contain crude prices, though the trend remains headline-sensitive. Global cues were further strengthened by strong AI-led tech earnings and large fund-raises, while yen-led dollar weakness aided EM flows."

"Domestically, favourable political cues, improving infra executions, and ECLGS 5.0 approval remain supportive, especially for MSME sectors. However, gains across financials, pharma, auto, and realty were partly led by short covering and tactical moves. With input cost pressures and FX risks still present, a selective investment approach is advisable," he added.

Oil slump drives macro relief rally

Brent crude fell nearly 8% to $100.51, while WTI crude dropped over 9% to around $92, easing investor concerns. Lower oil prices are seen as a key positive for India’s macro outlook, as they reduce input costs, support currency stability and improve fiscal dynamics.

Broad-based buying across sectors

The rally was broad-based, with all sectoral indices except FMCG ending in the green, reflecting strong risk-on sentiment.

Financials, auto, pharma and realty stocks led the gains, while midcap and smallcap indices also outperformed, in line with improving domestic and global cues.

Aviation stocks surge on policy support

Shares of InterGlobe Aviation surged 6.74%, emerging as the top gainer on the Nifty, while SpiceJet also saw sharp gains.

The rally was driven by the government’s approval of a credit line guarantee scheme for airlines, which is expected to ease liquidity stress in the sector. The move comes at a time when carriers are facing elevated costs and operational disruptions linked to the West Asia conflict.

Among gainers, InterGlobe Aviation led the pack, followed by Trent , Asian Paints and State Bank of India , which rose between 3% and 4%. On the downside, oil-linked and defensives lagged. Shares of Oil and Natural Gas Corporation fell 3.12%, while Reliance Industries declined 1.70%. Power Grid Corporation of India , NTPC , Larsen & Toubro and Hindalco Industries also ended lower.

Oil-sensitive trade drives divergence

The sharp fall in crude prices led to a divergence within the market, with oil consumers and domestic cyclicals gaining, while upstream energy stocks came under pressure on expectations of lower realisations.

Hariprasad K, SEBI-registered Research Analyst and Founder, Livelong Wealth, said, "Nifty spent the first half of the session in a tight, range-bound zone, reflecting indecision among participants. Heavy options open interest at 24,100 Call and 24,000 Put effectively capped the index within a narrow band until early afternoon, signalling a clear expectation of consolidation."

"The risk sentiment improved visibly, with India VIX cooling by 5.8% to 16.88, indicating a drop in fear and a return of confidence in the latter half. Oil-sensitive sectors outperformed, with IndiGo, BPCL, Asian Paints, and Pidilite gaining on the back of falling crude, which directly improves input cost dynamics and margins. Overall, today’s move highlights how global macros, especially crude and geopolitics, continue to dictate short-term market direction, with domestic indices reacting swiftly to external triggers," he added.

The rally was largely driven by macro factors, including easing geopolitical tensions, softer crude prices, improving global sentiment and supportive domestic cues such as steady earnings and currency stability.

The sustainability of the upmove will depend on whether the US-Iran negotiations translate into a formal agreement, as markets remain sensitive to developments in West Asia.