Markets Rebound After Trump-Led Selloff; Sensex Gains 500 Points, Nifty Tops 24,000

Indian benchmark indices opened sharply higher on Thursday, recovering from their biggest single-day decline in nearly three months, as value buying emerged after the previous session's selloff and continued foreign institutional investor (FII) buying supported sentiment despite lingering geopolitical concerns.

At around 9:30 am, the BSE Sensex was up 510.62 points, or 0.67%, at 77,014.22, while the NSE Nifty 50 gained 155 points, or 0.65%, to 24,037.05. Market breadth remained firmly positive, with 2,246 stocks advancing against 617 declines, while 151 remained unchanged.

Sectoral performance was broadly positive, with all Nifty indices trading in the green except the IT index. Pharma, midcap and smallcap stocks led the gains, indicating broad-based buying across the market.

The recovery followed Wednesday's sharp correction, when the Sensex plunged 1,677 points and the Nifty dropped 517 points after renewed tensions in the Middle East rattled global markets.

Value Buying, FII Support Aid Recovery

Investors returned to beaten-down stocks after the previous session's steep decline, helping benchmark indices rebound.

Foreign institutional investors also remained supportive, purchasing equities worth Rs 1,963 crore on Wednesday, extending their buying streak to six consecutive trading sessions despite renewed geopolitical uncertainty.

Analysts said sustained foreign inflows, particularly into large-cap stocks, continue to provide an important cushion to the domestic market.

Geopolitical Risks, Oil Prices Remain In Focus

Investor sentiment, however, remained cautious after the US military launched fresh strikes on Iran aimed at keeping the Strait of Hormuz open for commercial shipping. The action came hours after US President Donald Trump declared that the interim agreement with Iran was "over", reviving fears of a fresh escalation in the Middle East.

Trump later sought to calm markets by saying he did not expect the conflict to escalate into a full-scale war.

Brent crude futures rose 0.8% to around $78.65 per barrel and have gained nearly 9% this week after briefly crossing the $80 mark for the first time since June 22. The sharp rise in crude has revived concerns over inflation and prompted investors to trim expectations of interest rate cuts globally.

Asian Markets Recover As Chip Stocks Bounce

Asian markets traded modestly higher on Thursday as semiconductor stocks rebounded after heavy selling in recent sessions.

Japan's Nikkei rose 1.5%, snapping a three-session losing streak, led by gains in AI and semiconductor-related companies. Advantest climbed 6.4%, Kioxia surged 9.4%, while Fujikura advanced 5.4%.

The recovery followed a strong overnight session on Wall Street, where technology stocks gained after reports of a more than $30 billion chip supply agreement between Broadcom and Apple, along with news that China may allow leading AI companies to purchase a limited number of Nvidia's H200 chips.

Analysts See Stability If Oil Remains Below $100

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said Wednesday's sharp correction was largely driven by geopolitical concerns after Trump's comments on Iran and the spike in crude oil prices.

He noted that while Brent crude near $80 has raised concerns, it is not yet a major threat to India's macroeconomic stability.

"The crisis will re-emerge only if the tensions lead to the closure of the Strait of Hormuz again and consequently crude spiking above $100. The present futures do not reflect such a pessimistic scenario," Vijayakumar said.

He added that continued FII buying remains an encouraging trend, with foreign investors purchasing equities worth nearly Rs 3,954 crore over the past four trading sessions.

According to Vijayakumar, if crude prices remain stable, large-cap stocks, particularly in the financial and automobile sectors, are likely to remain resilient despite the uncertain geopolitical backdrop.