Sensex Climbs 650+ Points Despite Middle East Tensions; Top 3 Reasons Behind the Rally

Sensex Soars 650+ Points Despite Iran-US Conflict; 3 Factors Fueling the Market Rally

Indian benchmark indices staged a strong comeback on Thursday, with the Sensex jumping over 650 points and the Nifty climbing back above the 24,000 mark, defying escalating tensions between the US and Iran that have pushed crude oil prices higher. The rally followed a nearly 2 per cent decline in the previous session, as investors returned to equities amid improving sentiment and continued institutional buying.

In early trade, the BSE Sensex gained more than 530 points to trade above 77,000, while the Nifty 50 advanced around 156 points to cross 24,000. Broader markets outperformed the benchmarks, with both the Nifty Midcap 100 and Nifty Smallcap 100 rising more than 1 per cent.

Banking and FMCG stocks led the gains, while the IT sector remained under pressure, with the Nifty IT index slipping nearly 2 per cent.

The rally came even as Brent crude hovered around $78 per barrel following renewed hostilities between Washington and Tehran, which have raised concerns over supply disruptions through the Strait of Hormuz.

What’s Driving the Rally?

Easing Volatility

The India VIX, often referred to as the market’s fear gauge, fell nearly 9 per cent to around 13.4, indicating that investors were becoming less anxious despite geopolitical uncertainty.

Value Buying After Wednesday’s Sell-Off

Market participants took advantage of lower valuations after the previous session’s sharp correction. Analysts believe the recent consolidation has made several quality stocks attractive, prompting fresh buying interest.

According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments, markets are not yet anticipating a prolonged oil shock. He noted that crude prices around $80 per barrel remain manageable for India, with the real concern arising only if oil crosses $100 due to a sustained disruption in the Strait of Hormuz.

Sustained Institutional Buying

Foreign Institutional Investors (FIIs) continued to support the market, remaining net buyers for the fourth straight session after purchasing equities worth Rs 1,963 crore on Wednesday. Domestic Institutional Investors (DIIs) also returned as net buyers, investing Rs 790 crore, further boosting market confidence.

Despite the geopolitical uncertainty and higher crude prices, easing volatility, attractive valuations and sustained institutional inflows helped Indian equities rebound sharply, signalling that investors remain optimistic about the domestic market’s resilience.