Brent crude prices retreated in the session as market participants digested reports of a ceasefire between the U.S. and Iran, easing immediate fears of a supply disruption in the Strait of Hormuz.
The diplomatic development removed a key risk premium from energy markets, allowing prices to soften from recent highs.
27% in noon trading, erasing the selling pressure that had weighed on markets the previous day.
The drop in oil prices provided a tailwind for emerging market assets, particularly in India.
The rupee strengthened against the dollar as lower import costs improved the trade balance outlook.
Simultaneously, Indian equity benchmarks staged a sharp recovery, with the Nifty 50 climbing 0.95% and the BSE Sensex advancing 1.27% in noon trading, erasing the selling pressure that had weighed on markets the previous day.
In the fixed-income market, government securities rallied on Wednesday.