Why Markets Ended Strong Today: Oil Drop, FII Flows Boost Indices

Indian equity benchmark indices ended Friday's session on a strong note, with the Nifty closing above the 24,350 mark, supported by broad-based buying across sectors and improving global cues.

The Sensex rose 504.86 points or 0.65% to settle at 78,493.54, while the Nifty gained 156.80 points or 0.65% to close at 24,353.55. Market breadth remained firmly positive, with 2,906 stocks advancing, 1,233 declining and 152 remaining unchanged.

Broader markets continued to outperform the benchmarks, with the Nifty Midcap index rising 1.2% and the Smallcap index gaining 1.5%, indicating sustained risk appetite among investors.

FMCG, Metals Lead Broad-based Rally

All sectoral indices ended in the green, with FMCG, media, metal, oil & gas, power, capital goods, consumer durables and energy stocks rising between 1% and 2%. The Nifty FMCG index emerged as the top gainer, advancing 2.65%.

Among stocks, Hindustan Unilever, Nestle India, JSW Steel, Power Grid Corporation and Apollo Hospitals were among the major gainers, while Wipro, HDFC Life, Sun Pharma, Larsen & Toubro and Mahindra & Mahindra were among the key laggards.

The rally was aided by easing geopolitical tensions and a decline in crude oil prices. Brent crude slipped over 4% to around $90.7 per barrel amid signs of a potential US-Iran agreement, reducing concerns over prolonged supply disruptions.

Rupee Strengthens, FII Flows Turn Positive

The Indian rupee strengthened by 27 paise to close at ₹92.92 per dollar, supported by softer crude prices and improving foreign fund flows.

Vinod Nair, Head of Research, Geojit Investments, said the market rally was driven by improving global conditions. "The domestic market closed higher, supported by prospects of a Middle East resolution and a reversal in FII flows into net buying. A ceasefire between Israel and Lebanon helped keep crude below $100 per barrel, easing pressure on import-dependent economies," he said.

He added that FMCG stocks led gains due to pricing power, healthy business updates and valuation comfort. "As the Q4 earnings season gathers pace, results will act as a key litmus test for FY27 estimates," Nair noted.

Market Cap Rebounds to $5 Tn

In a key milestone, the total market capitalisation of all listed companies on the BSE rebounded to the $5 trillion mark, returning to levels seen before the US-Iran-Israel conflict.

The recovery marks a sharp rebound of over $600 billion from the recent low of around $4.37 trillion recorded on March 30 during the market correction. The surge has been driven by a strong April rally, with benchmark indices gaining nearly 6.5% each.

Broader markets have led the recovery, with the BSE Midcap 150 and Smallcap 250 indices rising 9.86% and 12.9%, respectively.

Today's rally reflected improving sentiment driven by easing geopolitical tensions, falling crude prices and strong participation across sectors. While broader markets have recovered faster, benchmark indices are gradually catching up, supported by better liquidity conditions and expectations from the ongoing earnings season.