Sectoral participation remained firmly positive, with realty, auto, and metal emerging as the top gainers. Oil-sensitive segments such as aviation, paints, tyres, and cement also continued to attract buying interest following the sharp decline in crude oil prices. Broader markets participated actively in the rally, with both midcap and smallcap indices advancing over 1% each, reflecting a significant improvement in market breadth and investor risk appetite.
The rally was primarily driven by optimism surrounding a preliminary peace agreement between the US and Iran, which significantly eased concerns over potential disruptions to global energy supplies. Brent crude prices declined sharply to around the $83 per barrel mark, providing relief from inflationary pressures. The strengthening of the rupee and a decline in domestic bond yields further supported sentiment, while broad-based buying in heavyweight banking and infrastructure stocks aided the upmove. However, participants remain watchful of foreign institutional flows and further developments related to the formalisation of the peace agreement.
Technically, the Nifty has strengthened its recovery after decisively surpassing the upper band of the declining channel near the 23,800 mark and testing the psychological 24,000 level. A sustained move above 24,000 could pave the way for an extension towards the 24,400–24,500 zone in the near term. On the downside, the 23,500–23,650 region is expected to act as a critical support area in the event of any profit-taking. While the near-term outlook has improved meaningfully, we continue to advocate a stock-specific approach with disciplined risk management, favouring banking, financials, auto, infrastructure, and select domestic cyclical themes for long positions,” says Ajit Mishra – SVP, Research, Religare Broking.