Sensex gains 315 points, Nifty rises as crude prices ease, US-Iran deal hopes grow

SHANGHAI, 25 SEPTEMBER 2026 —

Indian equity markets staged a measured rebound on Friday, with the benchmark Sensex closing 315 points higher at 73,895, marking a 0.43 percent increase, while the Nifty 50 rose 77 points, or 0.34 percent, to end the session at 23,140.

The rally was driven primarily by easing crude oil prices, which had surged in the preceding sessions, and optimism that diplomatic talks taking place alongside the United Nations General Assembly could restore stability to Middle Eastern energy flows.

The banking sector led the charge in the broader market recovery, with the Nifty Bank index gaining 389 points, or 0.26 percent, to settle at 55,762. This performance contrasted sharply with the previous session, where the Bank Nifty had closed at 55,438, down 1.96 percent. The rebound in financial stocks signaled a tentative return of risk appetite among investors who had been cautious following the earlier sell-off.

However, the broader market indices showed mixed performance, indicating that the rally was not uniformly distributed across all market segments. The Nifty Midcap 100 index declined 0.23 percent, highlighting continued weakness in the mid-cap segment, whereas the NSE Smallcap 100 rose 0.17 percent and the Nifty Next 50 increased 0.39 percent.

Crude oil prices played a role in shaping the market sentiment on Friday. Brent crude slipped toward $105.6 per barrel during the day, a significant retreat after rising over 7 percent during the previous two sessions. West Texas Intermediate crude traded below $94, reflecting market expectations of restored Middle East oil flows linked to the ongoing diplomatic discussions.

The easing of energy prices provided relief to inflationary pressures and reduced the immediate threat of supply disruptions, which had previously weighed heavily on global equity markets. This development was particularly significant for emerging markets, where high energy costs can exacerbate current account deficits and currency volatility.

Despite the positive domestic cues, market pressures remained evident as US Treasury yields stayed above 5 percent, with the 10-year yield moving above the 5.20 percent mark and remaining close to multi-year highs. This rise in global yields put pressure on financial conditions and reduced the relative attractiveness of emerging-market equities, including India.

Foreign institutional investors (FIIs) continued their selling trend, having been net sellers of equities worth Rs 5,027 crore on September 24, while domestic institutional investors (DIIs) bought equities worth Rs 4,301 crore. The persistent foreign selling, coupled with global macroeconomic risks, remained a key overhang over the markets, limiting the potential for a more rally.

Sectoral performance on the National Stock Exchange (NSE) was largely positive, with most indices advancing except for IT, media, pharma, and healthcare. The auto, consumer durables, and realty sectors led the gains, rising 0.76 percent, 0.87 percent, and 0.70 percent respectively. This sectoral divergence suggests that investors were selectively targeting value stocks and sectors with immediate growth catalysts, rather than engaging in broad-based buying.

The IT sector, which had been a top laggard earlier in the week, continued to face pressure, reflecting global tech sector volatility and specific industry concerns.

The Indian rupee exhibited volatility throughout the week, fluctuating between 95.57 and 95.97 against the US dollar before closing near 95.85. The currency’s movement was constrained by commodity price volatility, particularly in crude oil and gold, along with a stronger dollar. Analysts noted that rising global yields and a stronger dollar had weighed on the rupee, limiting its ability to sustain gains.

The rupee’s performance is closely linked to global macroeconomic trends, and its volatility reflects the complex interplay between domestic factors and external pressures.

Market analysts observed that the rebound was primarily due to selective value buying rather than a broad-based increase in risk appetite. There was a clear divergence between large-cap stocks, which showed resilience, and weaker mid- and small-cap segments, which continued to lag. This divergence suggests that investors remain cautious and are carefully selecting opportunities based on fundamental strength and valuation metrics.

The sustainability of the rebound was seen as dependent on several key factors, including crude price stabilization, cooling global yields, and reduced foreign selling pressure.

Asian markets traded mixed on Friday, with China’s Shanghai index declining 1.04 percent and Shenzhen falling 2.34 percent, while Japan’s Nikkei gained 1.23 percent. Hong Kong’s Hang Seng Index declined 1.77 percent, while South Korea’s Kospi rose 0.9 percent. US markets ended largely lower overnight, with the Nasdaq edging up 0.01 percent, the S&P 500 slipping 0.02 percent, and the Dow Jones declining 0.31 percent.

These mixed global cues contributed to the cautious sentiment in Indian markets, where investors were weighing domestic positives against global headwinds.

Geopolitical uncertainty remained elevated amid unclear diplomatic progress between the US and Iran. Renewed tensions and risks surrounding energy supply routes kept global investors cautious, while any further escalation could push crude oil prices higher. The phased agreement reported on Friday offered a temporary reprieve, but the long-term outlook for regional stability remained uncertain.

Investors are closely monitoring diplomatic developments, as any breakthrough could provide a sustained boost to market sentiment, while any setback could trigger renewed volatility.

The Indian equity market’s performance on Friday highlights the delicate balance between domestic recovery and global macroeconomic challenges. While the rebound in benchmark indices and banking stocks is a positive sign, the continued weakness in mid- and small-caps and the persistent foreign selling indicate that the recovery is still in its early stages.

The market’s trajectory will depend on the ability of global yields to cool and crude prices to stabilize, as well as the progress of US-Iran negotiations. Investors are advised to remain selective and monitor key economic indicators and geopolitical developments closely.

In the previous session, the Nifty had closed at 23,063, down 1.64 percent, with immediate support placed at 22,800–23,000 and resistance seen at 23,250–23,300. The Bank Nifty had closed at 55,438, down 1.96 percent, with support at 55,000–55,200 and resistance at 55,800–56,000. The Friday session saw the Nifty break above the previous resistance level, suggesting a potential shift in momentum.

However, the sustainability of this move will depend on the broader market environment and the resolution of key global risks. The market’s ability to maintain gains will be a key indicator of the strength of the recovery in the coming weeks.