Markets shrug off West Asia tensions, close in the green

Markets staged a measured recovery on Thursday, bouncing back from Wednesday’s sharp sell-off even as the United States and Iran exchanged military strikes for a second consecutive day. The rebound came despite crude oil holding near $79 a barrel and the Strait of Hormuz situation remaining unresolved, signalling that domestic markets had largely priced in the conflict.

“The recovery was primarily supported by easing concerns over the West Asia after indications that Iran was willing to resume negotiations, which helped cool crude oil prices from their recent highs,” said Ajit Mishra, SVP Research at Religare Broking. “Continued foreign institutional buying and a decline in the India VIX further supported sentiment.”

The Sensex gained 238 points, or 0.31 per cent, to close at 76,741.82, while the Nifty 50 added 80.75 points, or 0.34 per cent, to end at 23,962.80. Broader markets outperformed the benchmarks, with the Nifty Midcap 100 advancing 1.38 per cent and the Nifty Smallcap 100 surging 1.80 per cent, reflecting healthy market breadth with advances outnumbering declines by more than 3:1.

Sectorally, Realty led the charge with gains of over 3.3 per cent, followed by Media, PSU Banks and Consumer Durables. IT and Auto were the only sectors to close in the red, with IT under pressure ahead of TCS’s first-quarter earnings report. The IMF’s reaffirmation of India as the world’s fastest-growing major economy, revising the FY28 growth forecast upward to 6.7 per cent even as it marginally trimmed the FY27 projection to 6.4 per cent, also bolstered sentiment through the session.

On the currency front, the rupee recovered around 16 paise to trade at 95.37 against the dollar, aided by short covering and a 1.15 per cent pullback in crude oil prices. However, geopolitical uncertainty is expected to keep volatility elevated. Gold on COMEX gained around 0.75 per cent, recovering to $4,075 after finding support at that level, while MCX Gold moved toward ₹1,44,500. Silver gained over 1.3 per cent, with safe-haven demand supporting precious metals.

In global markets, European equity futures rebounded roughly 1 per cent after Brent crude held below $80 per barrel, easing fears of an immediate inflation shock. Fixed income markets saw yields drift higher, with the 10-year Bund yield moving back above 3 per cent, though analysts at Julius Baer maintained their overweight duration stance, viewing the spike as an entry opportunity rather than a structural shift.

With the TCS result now out, the broader IT sector earnings season is underway, and management commentary from peers like Infosys and Wipro will be closely watched. The market will scrutinise whether TCS’s AI deal momentum is company-specific or a broader industry tailwind. For Indian equities, Friday’s session will open with TCS numbers as the primary data point, with global cues from the US-Iran situation, foreign fund flows, and crude oil prices remaining the key macro overhangs.