Indian benchmark indices surged over 2% on Wednesday as investors reacted positively to hopes of a possible de-escalation of the West Asia conflict. The rally followed sharp losses in the previous sessions, during which markets had fallen nearly 4%. Trading remained closed on Tuesday due to Mahavir Jayanti.
Around 10 AM, the NSE Nifty 50 and the BSE Sensex were both trading nearly 2.5% higher. All sectoral and broader market indices on the NSE posted strong gains. The India VIX, a key measure of market volatility, dropped more than 9%, although it continued to remain at elevated levels.
The rebound came after Indian equities recorded their steepest monthly decline in six years in March, falling over 11%. Foreign institutional investors sold a record $12.7 billion worth of Indian equities amid concerns over the West Asia war and the rupee’s sharp depreciation against the US dollar.
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Global markets also rallied on optimism surrounding diplomatic developments. US markets jumped 3–4% overnight, marking their biggest single-day gain since May 2025, while Asian markets rose up to 7% in early trade.
US President Donald Trump stated that the United States could end military strikes on Iran within two to three weeks, even without a formal peace agreement. His comments boosted global investor sentiment despite concerns about policy inconsistency.
Iranian President Masoud Pezeshkian signaled readiness to end the conflict with the US and Israel under certain conditions. Although both sides’ statements provided temporary relief to markets, strikes continued across the region, with Hezbollah joining the conflict and reports of attacks affecting Kuwait’s airport.
Investors now closely monitor geopolitical developments, as stability in West Asia remains critical to global markets and economic confidence.
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