Indian markets and their Asian peers rebounded sharply on Tuesday, recouping much of their losses from a day earlier, after US President Donald Trump announced a temporary halt to strikes on Iranian energy infrastructure, easing geopolitical concerns.
Indian benchmark Nifty 50 rose 1.78% to close at 22,912.40 after a relief rally and a short-covering on the expiry day. The Sensex 30, too, rose 1.89% to close at 74,068.45 on Tuesday, raising the BSE’s market capitalization by ₹7.56 trillion.
Key Asian benchmarks traded in line with India’s bourses. Japan’s Nikkei 225 index closed 1.4% higher, Hong Kong’s Hang Seng index 2.8%, South Korea’s Kospi index 2.7%, and China’s CSI 300 index was up 1.3%.
The Nifty 50 breached the 22,735 technical resistance level, signalling near-term strength. On Monday, the index had closed at 22,512.
“This opens the door for the market to test the next resistance level of 23,512 by month-end, provided no negative news crops up,” said Rajesh Palviya, senior vice president (research) at Axis Securities.
According to Om Mehra, technical research analyst at SAMCO Securities, Tuesday’s rise reflects a short-term relief rally, while the broader trend remains in a corrective phase.
“There is no strong underlying demand pushing crude prices up,” said Srikant Chouhan, head of equity research at Kotak Securities. “So, if any positive news emerges on the geopolitical front, we could see a sharp correction in crude.”
Broader Indian indices also did well, the Nifty Midcap index closing 2.6% higher and the Nifty Smallcap, 2.4%.
Lower crude prices may have also led to the relatively stable markets today, said Chouhan. For the second day running, Brent crude traded below $100 per barrel, and was at $98.15 as of 18:02pm. Crude oil has surged 32% since the war began.
Meanwhile, MCX gold price surged by 2.19% on Tuesday. The rupee, which has depreciated 3.09% since the war began, appreciated by 10 paise to 93.88.
Foreign Institutional Investors (FIIs) net sold shares worth ₹8,009 crore on Tuesday while DIIs (domestic institutional investors) net bought ₹5,867 crore of equities. FIIs have pulled out ₹90,153 crore from Indian equities this month through Friday (20 March), data from NSDL showed. Notably, the US-Iran war began on 28 February.
According to Siddhartha Khemka, head of research for wealth management at Motilal Oswal Financial Services, the relief rally is likely to remain conditional on incoming news flow and official commentary from both sides, with markets expected to stay sensitive to these cues and volatility likely to persist.
Earnings impact
Near-term earnings visibility for manufacturing companies has been impacted to some extent and is reflected in stock prices. However, most firms have limited direct exposure to the Middle East (typically under 5%) and are adapting to supply disruptions by rerouting shipments via the Cape of Good Hope, said Chandraprakash Padiyar, senior fund manager at Tata Asset Management.
“While this raises transit time and costs, it is a global issue, not India-specific, and any earnings impact is likely confined to March–April, with normalisation expected from May–June. Overall, FY27 earnings are unlikely to see any material impact,” Padiyar added.
