Markets rebound sharply amid positive global cues and foreign inflows

Indian equity markets rebounded sharply on Friday, 20 June, ending a three-day losing streak, as a combination of positive global cues, renewed foreign investor interest, and easing geopolitical tensions boosted sentiment.

The benchmark indices gained nearly one per cent each, with the BSE Sensex rising 824.50 points, or 1.01 per cent, to an intraday high of 82,186.37, and the NSE Nifty 50 climbing 247.20 points, or 0.99 per cent, to touch 25,040.45. The Sensex had opened at 81,354.85 and went on to gain over 900 points at its peak, while the Nifty, opening at 24,787.65, surged past the 25,000 mark during the session.

The rally was broad-based, with the BSE Midcap and Smallcap indices also gaining over half a per cent each. The sharp uptrend added approximately Rs 4 lakh crore to investors’ wealth in a single session, as the overall market capitalisation of BSE-listed companies rose from Rs 443 lakh crore to nearly Rs 447 lakh crore.

A key driver behind Friday’s rally was the strong performance of Asian markets, including Japan’s Nikkei 225, South Korea’s Kospi, Hong Kong’s Hang Seng, and China’s Shanghai Composite. These gains lifted investor sentiment in India and provided a firm footing for domestic equities.

In addition, foreign institutional investors (FIIs) turned net buyers, purchasing shares worth Rs 934.62 crore on Thursday, 19 June.

Domestic institutional investors (DIIs) also supported the market with net purchases of Rs 605.97 crore.

The sustained foreign inflows, especially in the face of a softening US dollar, played a significant role in the market’s turnaround. 

Adding to the optimism, the Indian rupee appreciated by 13 paise to 86.60 against the US dollar in early trade, supported by a drop in global crude oil prices and a weakening greenback. Brent crude futures declined by 2.45 per cent to USD 76.92 per barrel.

This fall in oil prices is a positive for India, which imports the bulk of its energy needs, as it helps ease inflationary pressures and reduces the country’s import bill. Another indicator of improved market confidence was the India VIX, a measure of expected volatility, which declined over 4 per cent to 13.66, suggesting reduced investor anxiety.

 The day’s gains were further supported by strong buying in index heavyweights such as Reliance Industries, Bharti Airtel, and HDFC Bank. Public sector project financing companies like IREDA, PFC, REC, HUDCO, and IRFC also rallied after the Reserve Bank of India finalised its guidelines on project finance. The final norms eased provisioning requirements compared to the earlier draft, improving sentiment around lending in this space.

Adani Group stocks, which had been under pressure due to the ongoing Iran-Israel conflict, also saw a recovery. Adani Ports & Special Economic Zone rose 1.6 per cent to Rs 1,356.25 after falling to a day’s low of Rs 1,334.80.

Investor concerns around the group had intensified due to its 70 per cent stake in Israel’s Haifa Port, reportedly affected by the conflict. However, Pranav Adani, director at Adani Enterprises, reassured the market that all overseas assets were secure and there was no cause for alarm.

Despite Nifty hovering near its previous closing levels, the broader market exhibited greater movement. Anand James, chief market strategist at Geojit Financial Services, observed that only 11 per cent of Nifty 500 stocks ended above their 10-day simple moving averages, pointing to the possibility of a technical pullback.

He identified the 24,720–24,690 range as a crucial support zone, while suggesting that a drop below 24,500 would be needed to trigger any serious concern over the market’s recovery.

Geopolitical tensions, while still simmering in the background, did not escalate further, allowing markets some breathing room. Investors drew a degree of reassurance from comments by the White House indicating that US president Donald Trump would consider possible involvement in the Iran-Israel conflict over the coming fortnight.

Amid ongoing global uncertainty — from the Russia–Ukraine war to recent tensions in West Asia — the Indian stock market has continued to demonstrate resilience.

According to Jaspreet Singh Arora, chief investment officer at Equentis Wealth Advisory Services, India’s markets may reach new highs if global geopolitical conditions stabilise further.