The Indian stock market staged a strong rebound on March 10 after two consecutive sessions of sharp losses, as easing geopolitical concerns and falling crude oil prices lifted investor sentiment.
The Sensex climbed 640 points, or 0.82 percent, to close at 78,205.98, while the Nifty 50 advanced 234 points, or 0.97 percent, to settle at 24,261.60.
Broader markets outperformed the benchmarks. The BSE Midcap index gained 1.66 percent and the BSE Smallcap index jumped 2.04 percent.
The rally added nearly ₹6 lakh crore to investor wealth in a single session, with the total market capitalisation of BSE-listed companies rising to more than ₹447 lakh-crore from about ₹441 lakh-crore in the previous session.
The recovery came after the market had fallen nearly 3 percent over the previous two sessions amid concerns over the West Asia conflict and surging crude prices.
Several global and domestic developments helped markets recover on Tuesday.
Markets drew support from indications that the conflict involving the US, Israel and Iran may not escalate further.
US President Donald Trump suggested that the conflict could end sooner than earlier expected, saying Iran’s air force and navy had suffered significant damage. Reports also indicated that the war could conclude well before the four-week timeframe initially anticipated.
These remarks eased fears of a prolonged conflict in West Asia, which had earlier rattled global markets.
Crude oil prices declined sharply after signals that geopolitical tensions might ease.
Brent crude fell nearly 9 percent to around $90 per barrel during afternoon trade on Tuesday.
The decline in oil prices provided relief to Indian markets, as higher crude prices typically worsen India’s trade deficit, fuel inflation and weaken the rupee.
Reports also indicated that the G7 nations were prepared to take measures such as releasing oil stockpiles if needed to stabilise global energy supplies.
The rupee also strengthened significantly, improving overall market sentiment. The currency closed 53 paise higher at 91.8050 per dollar on Tuesday. This came after the rupee had slipped to a record low of 92.3575 against the dollar on Monday amid fears of escalating geopolitical tensions and rising crude prices.
The recovery in the rupee reduced concerns about imported inflation and capital outflows.
The recent correction in equities triggered value buying across several key sectors.
Major gainers included:
Nifty Auto: up more than 3 percent
PSU Bank index: up over 2 percent
Nifty Bank and Financial Services: up nearly 2 percent each
Pharma index: up about 1.4 percent
Investors returned to quality largecap stocks in financials, automobiles and pharmaceuticals after the recent decline made valuations more attractive.
IT stocks, however, remained under pressure, with the Nifty IT index declining 0.46 percent.
Market experts noted that the correction had brought valuations of several largecap stocks closer to fair levels.
Global financial conditions also improved slightly.
The dollar index fell more than 0.5 percent
The US 10-year Treasury yield eased to around 4 percent from about 4.2 percent earlier
The decline in safe-haven demand suggested that investors were becoming more willing to take risk again as fears over geopolitical escalation moderated.
Together, easing oil prices, a stronger rupee and bargain buying in key sectors helped Indian equities recover sharply after two volatile sessions.