Indian equity benchmarks staged a sharp recovery on Wednesday, wiping out the selling pressure that had weighed on markets the previous day.
The BSE Sensex advanced 1.27% in noon trading, while the Nifty 50 climbed 0.95%, marking a decisive shift in sentiment after a volatile session on Tuesday where the Sensex had fallen 893 points and the Nifty dropped 279 points following seven consecutive days of gains exceeding 4%.
The market turnaround was fueled by a retreat in Brent crude prices, which eased immediate concerns about supply disruptions in the Strait of Hormuz.
Market participants are digesting reports of a ceasefire between the U.S. and Iran, which has lowered the risk premium embedded in energy costs.
This dip in oil prices provided a tailwind for Indian equities, particularly for sectors sensitive to input costs and import bills.
Adding to the positive momentum, the Reserve Bank of India (RBI) helped calm fears of an imminent rate hike.