4 min readApr 2, 2026 09:06 PM IST
The benchmark stock indices recouped 2% fall early in the session to close slightly higher on Thursday, and the rupee posted its biggest single-day gain since 2013 by closing nearly 1.8% higher against the US dollar, a day after the Reserve Bank of India (RBI) further tightened its stance against speculative trading of the currency by banks.
The Nifty 50 closed the session at 22,713.10 points, up 33.70 points or 0.15%.
The BSE Sensex closed 0.25% higher at 73,319.55.
Both the benchmark indices had nosedived 2% early in the session after US President Donald Trump’s comments about striking hard at Iran fanned fears of a prolonged war.
But a strong buying of information technology (IT) stocks helped indices gain some lost ground. The IT sector gained nearly 3%, and was the biggest winner on the day.
Rupee logs steepest single-day rise since 2013
The rupee, meanwhile, climbed to 92.83 against dollar, and settled at 93.10, up 1.8% from the previous session. It was the steepest single session rise of the Indian currency since 2013, according to Reuters.
A stronger rupee increases profit margins for Indian IT services majors, most of whose business comes from US-based clients.
While the benchmark indices staged a recovery, the India VIX, which measures market uncertainty, rose 2%, indicating that any rally seen is likely shallow with investor sentiment still uncertain.
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“By saying core strategic objectives are nearing completion in the Iran War, Trump signals near-term finality to the West Asian crisis. In the next 2 to 3 weeks, either the escalation could increase substantially, including attacks on Iranian power and crude facilities, or some deal could be achieved. Uncertainty will prevail in the near term with crude oil prices remaining firm,” said Garima Kapoor, deputy head of research and economist at Elara Capital.
Crude oil prices were back at around the $105/barrel level after Trump’s comments, after having fallen to around $100/bbl. The market is also taking Trump’s statements with a pinch of salt due to the many inconsistencies in the past, various market experts indicated.
Outlook remains bleak
The longer-term outlook for Indian markets is also turning bleak as the war in West Asia drags on, and energy prices remain elevated. Nomura downgraded its view on the Indian stock market, citing these reasons.
“Since the Iran war broke out, we have consistently flagged the vulnerability of India equities to a scenario of protracted conflict and elevated oil/energy prices. While yesterday’s newsflow and a rebound in global equities on optimism around an imminent ‘end of war’ narrative has reduced tail risks, we are concerned that prolonged disruption in oil/energy flows via the Strait of Hormuz can still keep oil/energy prices elevated longer than we had initially hoped for,” the research firm said.
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“Our economics team views India’s economy as one of the most vulnerable to high energy prices, and our assessment is that the MSCI India index has a high share of companies likely to be fundamentally negatively impacted by higher commodity prices.”
These concerns, coupled with existing concerns about the AI-led disruption, may lead to the Indian market struggling among the other markets in the region, the firm said, adding that the South Korean and Chinese markets provide better opportunities.
This comes after other global research firms, such as Goldman Sachs, have already downgraded their view on the Indian markets and cut earnings estimates significantly. Such commentary by these research houses further reduces the likelihood of foreign capital returning to the Indian markets. March saw record foreign capital outflows, with foreign institutional investors (FIIs) dumping $12.7 billion of Indian shares. April also started on a negative note, with FIIs selling $2.1 billion of shares on Wednesday.
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