Sensex, Nifty rebound after sharp fall: Why the market is rising today

Indian equity benchmarks rebounded in Friday's trading session, attempting to recover after a steep decline in the previous session. In early trade, the 30-share BSE Sensex pack surged as much as 997.4 points to hit a high of 75,204.64, while the NSE Nifty index climbed 317.55 points to 23,319.70.

The rally was driven by gains in heavyweight stocks such as Reliance Industries Ltd (RIL), State Bank of India (SBI), ICICI Bank Ltd, Infosys Ltd, Larsen & Toubro (L&T), Tata Steel Ltd, ITC Ltd, Axis Bank Ltd, NTPC Ltd, Power Grid Corporation of India Ltd and Bharti Airtel Ltd, which lifted the benchmarks.

Sectoral participation remained broad-based, with auto, banking, IT, metals, realty, pharma, chemicals and energy stocks witnessing strong buying interest. The broader market also traded in positive territory, as Nifty Midcap 100 rose 1.52 per cent and Nifty Smallcap 100 advanced 0.89 per cent.

The rebound generated over Rs 6.5 lakh crore in investor wealth during the opening trade. The BSE's total market capitalisation (m-cap) increased by Rs 6.58 lakh crore to Rs 432.71 lakh crore, compared with Rs 426.13 lakh crore in the previous session.

Kranthi Bathini, Equity Strategist at WealthMills Securities, said a decline in crude oil prices is likely helping domestic indices regain momentum after a sharp sell-off in the previous session. "We are witnessing a dead cat bounce this morning, with some bottom fishing taking place along with short covering."

Devarsh Vakil, Head of Prime Research at HDFC Securities, said, "Israeli Prime Minister Benjamin Netanyahu said that Israel is supporting US efforts to reopen the Strait, would not strike Iranian oil and gas targets again, and that the war could end sooner than expected."

His "verge of victory" remarks lifted risk assets as markets priced in a shorter conflict — though volatility persisted, he added.

"US oil prices extended their decline after Treasury Secretary Scott Bessent signalled that Washington may soon lift sanctions on Iranian crude held aboard tankers, aiming to relieve price pressures following Iran's closure of the Strait of Hormuz. In a joint statement, the US, Britain, Canada, France, Germany, and Japan affirmed their readiness to help ensure safe passage through the Strait of Hormuz," Vakil also stated.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that the upmove in the market could be related to renewed "hope of de-escalation" in the West Asia conflict. "Israel PM's remarks indicate that there won't be further attacks on Iran's oil and gas infrastructure. This has cooled the Brent crude to $106 from the peak of $118 yesterday."