Sensex, Nifty close in green as easing Israel-Iran tensions lift sentiment

The BSE Sensex gained 394.50 points, or 0.54%, to close at 73,918.76. The NSE Nifty50 rose 119.10 points, or 0.52%, to settle at 23,242.10.

In Short

• Indian benchmark indices closed higher on easing Israel-Iran tensions
• Banking stocks led the rally with broad sectoral participation
• Soft crude prices and pause in geopolitical tensions supported recovery

Indian benchmark indices ended in positive territory on Tuesday as easing tensions between Israel and Iran improved investor confidence and supported a recovery in risk assets.

The BSE Sensex gained 394.50 points, or 0.54%, to close at 73,918.76. The NSE Nifty50 rose 119.10 points, or 0.52%, to settle at 23,242.10.

BANKING STOCKS LEAD THE RALLY

Gains were broad-based across sectors, with banking and financial stocks leading the market higher. Investors appeared more willing to take on risk after concerns over a further escalation in the Middle East eased.

Ponmudi R, CEO of Enrich Money, said, "Sectoral participation was largely broad-based. Banking and financial stocks led the gains, benefiting from the improvement in risk appetite, while IT, media and CPSE stocks lagged the broader market and ended under pressure."

He added that while sentiment improved during the session, investors remain cautious about the overall outlook.

"Markets remain highly sensitive to developments in the Middle East, energy prices and global risk sentiment. A more durable recovery is likely to depend on sustained diplomatic progress, a lasting reduction in regional tensions and continued stability in energy markets. Until greater clarity emerges on these fronts, volatility is likely to remain elevated and investor positioning selective," he said.

GLOBAL CUES REMAIN IN FOCUS

Market experts believe the relief rally was supported by softer crude oil prices and a temporary pause in geopolitical tensions. However, concerns around foreign investor outflows and global economic conditions continue to weigh on sentiment.

Vinod Nair, Head of Research at Geojit Investments Limited, said, "Domestic markets are witnessing a mild recovery after the recent sharp decline, supported by a pause in Iran-Israel tensions and softer crude prices. However, sentiment remains fragile, with continued FII outflows and higher bond yields highlighting persistent concerns around evolving global macro dynamics."

He added that investors are closely watching upcoming US inflation data, which could influence expectations around US Federal Reserve policy and global liquidity conditions.

"In the near term, markets are likely to remain volatile and range-bound, with investors staying cautious until clearer global cues emerge, even as Q4FY26 earnings were slightly better while the outlook for Q1FY27 remains weak," Nair said.

TOP GAINERS AND LOSERS

Among the top gainers on the BSE were Indigo, State Bank of India, ICICI Bank, Axis Bank and Bajaj Finance. The stocks rose 4.04%, 2.13%, 2.03%, 1.92% and 1.84%, respectively.

On the losing side, Titan, NTPC and Power Grid Corporation of India were among the biggest laggards, declining 2.08%, 1.96% and 1.64%, respectively.

SECTORAL INDICES

Among sectoral indices, Nifty Auto emerged as one of the best performers, rising 1.34%. Nifty FMCG also gained 0.73%.

However, not all sectors participated in the rally. Nifty IT slipped 0.48%, while Nifty Media fell 0.15%, reflecting continued pressure in select segments of the market.

The market may have staged a recovery, but uncertainty around global growth, inflation and geopolitical risks continues to keep investors on edge.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

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