Indian equities are off to a bumper start to the new fiscal year, FY27, as both key indices rallied over 1.5%, snapping a two-day sell-off and recovering from the steepest monthly drop in six years in March.
Market sentiment improved on the back of a drop in crude oil prices and rising hopes that the US-Iran war could end soon, which gave a much-needed boost to Dalal Street investors. The strong rebound in financials and auto stocks helped lift the markets, with the Nifty 50 eventually settling 1.56% higher at 22,676, while the Sensex closed at 73,134, up 1.65% from Monday’s close.
The broader markets also mirrored the sharp rebound, with both the Nifty Midcap 100 and Nifty Smallcap 100 indices closing higher by 2.3% and 3.3%, respectively.
Among sectoral indices, the Nifty PSU Bank index emerged as the top performer, surging 3.70%, while the Nifty Media, Nifty Chemicals, Nifty Metal, Nifty Realty, Nifty Auto, and Nifty IT indices all rallied over 2%. The Nifty Pharma index was the only sectoral loser, slipping 1%.
US President Donald Trump said Washington could end its military attacks on Iran within two to three weeks, adding that Tehran would not need to strike a deal as a prerequisite for the conflict to wind down, Reuters reported.
Defence, banks and capital market stocks drive broad-based rebound
Defence and auto stocks led the recovery rally, with Garden Reach Shipbuilders, Ola Electric, and Mazagon Dock Shipbuilders emerging as top gainers among Nifty 500 constituents, surging 19.6%, 13.6%, and 12.3%, respectively.
Other defence stocks such as Cochin Shipyard, Bharat Dynamics, and BEML also surged up to 12.2%.
The rally was supported by sustained optimism around India’s defence manufacturing push and a recent wave of large procurement approvals, keeping the sector firmly in focus for investors seeking both momentum and long-term structural growth.
A strong business update from DMart drove the stock 8% higher, while Ircon International rebounded 9%. Another railway stock, RailTel Corporation, advanced 7.2% to ₹263.8 apiece.
Meanwhile, capital market stocks such as Motilal Oswal Financial Services (MOSL), Angel One, and BSE ended with gains of up to 7.4% after the Reserve Bank of India (RBI) deferred its circular on capital market exposures of banks for a period of three months.
Groww, CAMS, Nippon Life India AMC, HDFC AMC, and Anand Rathi Wealth also closed higher in the range of 3–6%.
Similarly, all state-owned banks staged a strong recovery, with Punjab & Sind Bank rallying 6.6% and Bank of Maharashtra surging 5.8%. This was followed by UCO Bank, Central Bank of India, Indian Bank, Union Bank of India, and State Bank of India, all rising over 4%.
