A sign displays an image depicting the late Iranian Supreme Leader Ayatollah Ali Khamenei with the words in Arabic “Martyr of God”, on a street in Baghdad, Iraq, Wednesday, March 25, 2026. (AP Photo)
Indian stock markets rose for the second day in a row on Wednesday, posting gains of more than 1.5%, as hopes of a ceasefire in West Asia and easing crude oil prices provided a respite to investors. The benchmark indices have now bounced back 3.5% in the past couple of days, but remain over 7% so far in March.
While stock markets have recovered some ground, the rupee continued to trade close to the 94-per-dollar mark and intraday touched a new record low of 93.98 as foreign investors continued to pull out from Indian financial markets.
On Wednesday, the rupee closed at 93.98-per-dollar compared to Tuesday’s close of 93.87. Meanwhile, the benchmark Nifty index ended at 23,306.45, up 394.05 or 1.7%. The BSE’s 50-stock Sensex closed 1.6% higher at 75,273.45. All sectoral indices of the National Stock Exchange (NSE) saw robust gains, with consumer durables, chemicals, banking, and financial services among the top performers.
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Chemical manufacturers benefitted from hopes of a long-term ceasefire in West Asia, which has disrupted the supply of raw materials caused by Iran’s closure of the Strait of Hormuz. The same holds for consumer durables companies, with the blockade and high crude prices affecting plastic prices, a key component for such companies. Freight costs through the key waterway, which have skyrocketed due to the increased risk, have also threatened to eat into the margins of companies heavily dependent on crude oil and a global supply chain. Metal manufacturers, for example, are highly dependent on energy prices for their production cycle. For banking and financial services companies, geopolitical stability eventually boosts economic growth and leads to more loans being given out.
Earlier, on Tuesday, S&P Global had said that its flash composite Purchasing Managers’ Index (PMI) for March had slumped to the lowest since October 2022, suggesting that India’s private sector growth this month has been the weakest in almost three-and-a-half years.
Global crude oil prices have now fallen to around $95 per barrel, with the price of India’s crude oil basket declining to $147.24/bbl on Tuesday from $157.04/bbl on Monday. Prices could further decline if the delicate truce in the region holds.
The broader markets, consisting of mid- and small-cap stocks, have also rallied sharply in the wake of the ceasefire. The NSE’s broader market indices have gained around 5% during the two-day rebound after having fallen as much as 11% since the war in West Asia began.
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Despite the two-day respite, investors remain on edge, with much depending on how the conflict evolves. The India VIX, which is indicative of uncertainty in the market, is reflecting investors’ nervousness. While stock indices have rallied, the VIX has remained around 80% higher than pre-war levels.
“Stocks moving more than 1% in a single day has become a norm from rarity,” DSP Mutual Fund said in a note on Wednesday, adding that the Nifty is “only 12% away from its peak which does not even qualify this as a bear market”.
