Indian equities extended their rally for a third straight session on March 18, shrugging off geopolitical tensions in West Asia, elevated crude prices and continued weakness in the rupee.
The BSE Sensex rose 633 points, or 0.83 percent, to close at 76,704.13, while the Nifty 50 gained 197 points, or 0.83 percent, to settle at 23,777.80.
Broader markets outperformed, with the BSE Midcap index rising 1.8 percent and the Smallcap index climbing 2 percent.
Over the past three sessions, the Sensex has surged more than 2,140 points, or about 3 percent, while the Nifty 50 has gained 627 points.
Market capitalisation of BSE-listed firms rose to around ₹439 lakh-crore from ₹430 lakh-crore, adding over ₹9 lakh-crore to investor wealth during this period.
Despite the ongoing US-Iran war, several factors are supporting the rally:
Recent corrections following the escalation in West Asia had brought valuations to more attractive levels. This has triggered short covering, particularly in blue-chip stocks with strong fundamentals.
Mid cap and small cap segments are also witnessing renewed buying interest, with investors selectively accumulating quality stocks at lower levels.
Market participants appear to be pricing in a possible easing of tensions. Reports suggest renewed backchannel communication between the US and Iran.
There is also growing optimism that the conflict may not be prolonged, with expectations that clarity could emerge over the next few weeks.
Reports of India engaging with Iran to ensure safe passage of oil and LPG shipments through the Strait of Hormuz have lifted sentiment.
A staggered resumption of crude movement has raised hopes that supply disruptions may be temporary, reducing concerns over a prolonged energy shock.
Global crude prices, which had surged to around $119 per barrel last week, have cooled to near the $100 mark.
While still elevated, the decline has eased fears of a sharp impact on India’s inflation and growth outlook, offering relief to equity markets.
From a technical perspective, the Nifty has moved closer to the 23,800 level, with analysts expecting further upside driven by short covering.
The 24,000–24,100 range is seen as a near-term resistance zone, while 23,000–22,900 is expected to act as a strong support band.
The market’s resilience amid geopolitical uncertainty suggests that investors are focusing more on valuations, liquidity and expectations of a limited conflict.
However, volatility is likely to persist, with crude oil prices, currency movements and developments in West Asia remaining key triggers in the near term.