Indian Equity Markets Showed Some Rebound Today from Day's Lows

Mumbai, June 23, 2025: Indian equity markets demonstrated some resilience on Monday, staging a  recovery from early session lows. The Sensex bounced back by over 500 points from its intraday low of 81,476.76 and closed at 81,896.79, while the Nifty 50 closed at 24,971.90, after initial volatility driven by heightened geopolitical tensions in the Middle East.

Market Recovery Snapshot

The Sensex had initially plummeted by as much as 931 points, touching an intraday low of 81,476.76. Similarly, the Nifty 50 reached an intraday low of 24,824.85. Both benchmark indices managed to pare a significant portion of these losses by the end of the trading session. The Sensex ultimately closed down 511 points (0.62%) at 81,896.79, while the Nifty 50 settled at 24,971.90, down 141 points (0.56%).

Leading the charge in this recovery were several key stocks:

• Trent: Closed at ₹6,120, up 3.77%.
• Bharat Electronics (BEL): Closed at ₹420.90, up 3.10%, and also hit a new 52-week high of ₹422.40.
• Hindalco Industries: Closed at ₹661.40, up 1.89%.
• Bajaj Finance: Closed at ₹915.50, up 1.16%.
• Adani Enterprises: Closed at ₹2,472, up 0.96%.

Conversely, top losers on the Nifty 50 included Infosys (-2.40%), HCL Technologies (-2.11%), and L&T (-2.14%), indicating continued pressure on the IT sector.

Top 5 Reasons Behind the Sharp Rebound

1. Crude Oil Price Correction

Brent crude, which had surged to levels near USD 81.40 per barrel earlier in the day amid fears of geopolitical escalation, cooled down to around USD 77.50. This moderation in oil prices helped alleviate concerns surrounding imported inflation, providing a crucial tailwind to market sentiment, especially for a major oil importer like India.

2. Dip in Market Volatility

The India VIX index, a key gauge of market volatility, eased to 14.0475 levels by market close, although still up 2.74% on the day. This cooling of the ‘fear gauge’ signalled a reduction in panic among investors, encouraging fresh buying activity at lower levels.

3. Improved Global Sentiment

Wall Street futures, after witnessing early losses, reversed course by the Indian afternoon. Furthermore, major Asian markets such as Hong Kong’s Hang Seng and Shanghai Composite were trading higher, some by up to 1%. These signs of stability in global equities provided much-needed support and boosted confidence in Indian markets.

4. Limited Domestic Risk from Geopolitical Events

Despite the United States’ coordinated airstrikes on Iranian nuclear facilities, the market sentiment appeared to lean towards the crisis remaining contained rather than escalating into a wider conflict. Analysts largely assessed that Iran’s retaliatory capacity against the US and its allies might be limited, contributing to a more composed market reaction.

5. Strait of Hormuz Remains Open

Initial fears of a potential blockade of the vital Strait of Hormuz, a critical chokepoint for global oil and LNG trade, were lessened as the sea route remained open. This uninterrupted flow of oil reassured investors, reinforcing a “buy on dips” strategy. It’s noteworthy that over 35% of India’s crude oil imports and around 42% of its LNG imports pass through this strait. While India has diversified its oil sources, particularly with increased Russian crude imports, a closure would still have significant implications for freight rates and short-term price volatility.

What’s Ahead? 

As the trading session concluded, market participants appeared cautiously optimistic. The swift reversal from significant early losses underscores the underlying resilience of investor confidence, supported by stable macroeconomic fundamentals and timely corrections in global commodity prices, even amidst evolving geopolitical uncertainties. Investors will continue to closely monitor global developments, particularly those related to the Middle East and international commodity markets.

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