Mumbai:Indian stock markets traded higher on Wednesday despite renewed geopolitical tensions in West Asia, with benchmark indices Sensex and Nifty posting solid gains in early trade.
The BSE Sensex rose 486.11 points, or 0.66%, to 74,404.87, while the NSE Nifty50 advanced 133.45 points, or 0.57%, to 23,375.55.
The upbeat move surprised investors, as geopolitical conflicts typically trigger a risk-off sentiment. However, markets remained resilient due to a mix of supportive domestic and global factors.
Stable crude oil prices ease concerns
One of the key reasons behind the market’s strength is the stability in crude oil prices despite the escalation in tensions between the United States and Iran.
Brent crude rose only marginally by 0.67% to $92.06 per barrel, while WTI crude gained 0.60% to $88.73 per barrel.
Since India imports around 85% of its crude oil needs, a sharp rise in oil prices could have negatively impacted inflation, currency stability and economic growth. However, the absence of a significant spike in oil prices helped calm investor nerves.
Market experts believe investors are treating the latest escalation as a short-term development rather than a prolonged crisis.
Defensive stocks lead the rally
The rally was primarily driven by defensive sectors, particularly FMCG stocks, along with heavyweight companies.
The Nifty FMCG index emerged as the top performer, rising 1.52%. Among individual stocks, Hindustan Unilever led the gains on the Sensex with a 2.36% jump.
Reliance Industries climbed 1.90%, while Kotak Mahindra Bank, Trent and Asian Paints also posted notable gains. IT and banking majors such as TCS, State Bank of India, ICICI Bank and Infosys contributed to the upward momentum.
On the flip side, some stocks like NTPC, Tata Steel, Tech Mahindra and Bharti Airtel traded in the red.
Markets discount geopolitical risks
Another factor supporting the rally is that markets appear to have largely priced in geopolitical risks.
Investors tend to react sharply only when conflicts disrupt global supply chains or lead to a sustained rise in commodity prices. With crude oil still trading below the key $100 per barrel mark, there has been no widespread panic selling.
Technical factors support bullish sentiment
From a technical perspective, analysts remain cautiously optimistic about the market’s near-term outlook.
According to market experts, Nifty has managed to hold above the crucial 23,000 level. A decisive breakout above the 23,300 resistance zone could push the index towards 23,400–23,500 levels in the near term.
On the downside, immediate support is seen at 23,050, followed by the important 23,000 level. A breach below these levels may trigger profit booking.
Mixed trend in broader markets
While benchmark indices gained, the broader market showed a mixed trend. The Nifty Midcap 100 declined 0.15%, and the Nifty Smallcap 100 slipped 0.18%, indicating selective participation from investors.
Sectorally, apart from FMCG, indices such as Oil & Gas, Private Bank and Financial Services also recorded gains. However, Metal, Media and Auto sectors remained under pressure.
India VIX, often referred to as the market’s fear gauge, rose nearly 1% to 15.73, signalling that caution still persists among investors.
Conclusion
The resilience of Indian markets amid geopolitical tensions highlights the importance of underlying economic factors such as stable oil prices, strong performance of defensive stocks and investor confidence in domestic fundamentals.
Going ahead, crude oil movements and developments in the US-Iran conflict will remain key triggers for market direction, while investors are expected to stay selective in their approach.
(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 News Karnataka Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)