Markets roar back: Sensex jumps nearly 400 points, Nifty reclaims 23,200

Mumbai: Indian equity markets ended Tuesday's trading session on a positive note, recovering from the sharp decline seen a day earlier. The BSE Sensex climbed 394.50 points, or 0.54 per cent, to settle at 73,918.76, while the NSE Nifty 50 gained 119.10 points, or 0.52 per cent, to close at 23,242.10.

The rebound helped both benchmark indices snap a two-day losing streak and reflected improved investor confidence after recent volatility.

Easing West Asia tensions boost sentiment

A key factor behind the recovery was the easing of hostilities between Israel and Iran, which helped calm global markets. Investors welcomed signs of reduced geopolitical tensions, leading to renewed appetite for risk assets across major markets.

The positive global sentiment was reflected across Asian and European markets, many of which recovered from losses recorded in previous sessions.

Softer crude oil prices provide support

Declining oil prices also played a significant role in supporting equities. Brent crude, the global benchmark, fell around 1.66 per cent to trade near USD 92.69 per barrel.

Lower oil prices are generally viewed positively by Indian markets as they help ease inflationary pressures, reduce import costs and improve the country's macroeconomic outlook.

Banking stocks lead the rally

Financial stocks emerged as the biggest contributors to Tuesday's gains. Banking shares witnessed strong buying interest, helping the Bank Nifty rise sharply during the session.

Among the top gainers on the Sensex were InterGlobe Aviation, State Bank of India, ICICI Bank, Axis Bank, Bajaj Finance and Asian Paints. Public sector banks particularly outperformed, with the PSU Bank index posting strong gains.

Sectoral performance remains mixed

While banking, realty and automobile stocks attracted buying interest, some sectors continued to face pressure. Information technology and media stocks ended lower, indicating selective profit booking despite the broader market recovery.

Broader market indices also participated in the rally, with mid-cap and diversified indices finishing in positive territory, suggesting wider investor participation beyond large-cap stocks.

Global markets rebound

International markets largely traded higher. South Korea's Kospi surged more than 8 per cent, Japan's Nikkei 225 gained over 2 per cent and China's Shanghai Composite Index advanced more than 1 per cent. European markets were also trading in positive territory during the session.

The improvement in global risk sentiment was supported by easing geopolitical concerns and optimism surrounding technology and artificial intelligence-related sectors.

FIIs remain sellers despite market rebound

Despite Tuesday's gains, foreign institutional investors continued to remain cautious. Exchange data showed that FIIs sold equities worth ₹5,555.67 crore in the previous trading session.

Market experts noted that continued foreign outflows, elevated global bond yields and uncertainty surrounding major economic indicators remain concerns for investors.

Focus shifts to upcoming economic data

Analysts believe investors will closely watch upcoming US inflation data and other global macroeconomic indicators for clues on future interest rate trends and liquidity conditions.

While Tuesday's rally provided relief after recent losses, market participants remain cautious as global economic uncertainties and geopolitical developments continue to influence sentiment.