Indian equity benchmarks posted their best closing in nearly a year on Wednesday as a temporary ceasefire between the United States and Iran eased market anxiety.

'We Take Statements At Face Value': Deepak Shenoy Cautions D-Street Bulls After Iran Ceasefire Rally

Indian equity markets surged sharply on Wednesday, logging their strongest closing in nearly a year, as easing geopolitical tensions between the United States and Iran triggered a wave of optimism across Dalal Street. However, amid the exuberance, Deepak Shenoy urged investors to remain cautious about taking geopolitical developments at face value.

“Super move on the markets. I somehow find it incredible that we take statements at face value, from the same set of people that have lied to us for the last month. Optimism is a good thing of course, let's hope it lasts,” Shenoy, CEO of Capitalmind Mutual Fund said in a post on X.

The rally was sparked after Donald Trump announced a ‘double-sided ceasefire', signalling a temporary pause in hostilities. According to Trump, the United States will suspend bombing and attacks on Iran for two weeks, contingent upon Tehran ensuring the safe and immediate opening of the Strait of Hormuz—one of the world's most critical oil transit chokepoints. He also noted that Washington had received a 10-point proposal from Iran, which could serve as the foundation for a longer-term agreement.

Markets Cheer, Volatility Drops

The ceasefire announcement significantly reduced market anxiety, reflected in a sharp drop in the India Volatility Index (VIX) by nearly 20%. The cooling of geopolitical risk premiums also led to a steep correction in global oil prices, providing further support to equities.

West Texas Intermediate crude for May delivery plunged over 16% to $94.47 a barrel, while Brent crude for June delivery declined more than 15% to $92.21 a barrel—both slipping below the $100 mark. Lower crude prices are typically positive for India, a major oil importer, as they ease inflationary pressures and improve fiscal dynamics.

Indian equity benchmarks posted their best closing in nearly a year on Wednesday as a temporary ceasefire between the United States and Iran eased market anxiety. The Reserve Bank of India's decision to keep repo rates steady pulled up bank, auto and realty stocks.

The Nifty 50 settled 873.7 points or 3.78% higher at 23,997.35. The BSE Sensex added over 2,900 points (3.95%) to close at 77,562.9.

ALSO READ: Nifty, Sensex Log Best Session Since May After US-Iran Truce, RBI Policy; Banks Outshine

The broader markets matched the performance of the blue-chip gauges. The Nifty Smallcap 250 and Nifty Midcap 150 settled nearly 4% higher. On the BSE, over 3,700 stocks ended higher and 534 declined.

Gains were led by financial and infrastructure-heavyweights, with Shriram Finance and Adani Enterprises emerging as top performers on the Nifty, both jumping over 9%.

The bullish sentiment was not limited to frontline indices. Broader markets also witnessed strong buying interest, with the Nifty Midcap 150 index climbing nearly 4% and ending higher for the third straight session.

Ashok Leyland led the midcap rally with gains exceeding 13%, while Hindustan Petroleum, Aditya Birla Capital and HDFC AMC advanced more than 9% each.