Even so, investor wealth rose by ₹9.32 trillion with the market capitalization of BSE-listed firms climbing to ₹422 trillion.
The Nifty 50 jumped 1.56% to close at 22,679.40, while the BSE Sensex climbed 1.65% to settle at 73,134.32. Sentiment remained broadly upbeat, as geopolitical tensions eased. Comments from US President Donald Trump that the US could wrap up its military campaign against Iran within the next two to three weeks lifted sentiment.
Ashwin Patni, head of wealth management solutions at Julius Baer India, said the Nifty 50 is largely flat over the past two years, a sign that the recent correction has been fairly sharp and meaningful. "That also means valuations are starting to look more reasonable now," he said, adding that any stability or positive news flow could support equities.
However, he flagged a key risk: if uncertainty around the war lingers and crude prices stay elevated for long, the impact on both the economy and markets could become more pronounced.
Brokerage firm Elara Securities (India), in a 30 March report, said, "We assess one-year forward P/E relative to its rolling 10-year average. At ~17.3x, Nifty trades 7% below its 10-year average of ~18.6x, placing it in a historical 'bounce zone'."
Outside extreme disruptions like covid-19, this level has usually acted as a floor for valuations. Even during the Russia-Ukraine conflict, when Brent stayed above $100 per barrel, Nifty multiples rebounded from their 10-year rolling averages, the report said.
"Despite the positive close, the formation of a bearish candle on the daily chart signals a strong presence of sellers at higher levels," said Sudeep Shah, head - technical and derivatives research at SBI Securities.
He pegged immediate support for the Nifty at 22,550-22,500. A breach of this level could drag the index lower to 22,300 and then 22,100 in the near term. On the upside, 22,800-22,850 is likely to act as the immediate resistance.
According to provisional data from the BSE, foreign institutional investors (FIIs) were net sellers of Indian equities worth ₹8,331 crore on Wednesday, while domestic institutional investors (DIIs) provided support, net buying shares worth ₹7,172 crore.
Gainers and laggards
On the Nifty 50, Trent was the best performer, gaining nearly 7%, followed by InterGlobe Aviation and Adani Ports and Special Economic Zone, which rose about 6% each.
Among sectors, Nifty PSU Bank and Nifty Media were top gainers, up 3.7% each. The biggest laggards were Nifty Healthcare and Nifty Pharma, both down 1%.
Kotak Institutional Equities sees value emerging in more parts of the market after the sharp correction across sectors and stocks over the past three-four weeks due to the ongoing Iran-US conflict.
Its base case assumes the conflict lingers in the near term, tensions stay elevated for a few months, the Strait of Hormuz reopens in the coming weeks, and there is no lasting damage to key oil and gas infrastructure.
"However, we would stress that the better reward- risk balance should not be construed as anything beyond that…We still find valuations on the higher side for the bulk of the consumption and investment names," the report said.
What stood out was the strength beyond the heavyweights; broader markets joined the party. The Nifty Smallcap 250 surged 3.2%, and the Nifty Midcap 100 advanced 2.2%.
On the global front, MSCI Inc has announced that MSCI Greece indices will be reclassified from emerging market to developed market status in the May 2027 review, a move that could potentially redirect incremental flows toward markets like India.
"At present, the MSCI EM index comprises 24 countries, with Greece holding a modest weight of ~0.50% (50 bps), and post reclassification, this weight will be redistributed across the remaining EM constituents in proportion to their free-float market capitalization," said Abhilash Pagaria, head of Nuvama Alternative & Quant Research.
Given the relatively small weight, Pagaria noted the overall impact will be negligible and unlikely to move the needle for India or broader emerging markets (EMs). He adds that the 0.5% redistribution will be marginally absorbed by larger markets like China, Taiwan, Korea and India, with the effect remaining minuscule in absolute terms.
India has slipped into the laggards' bucket this year, with the BSE Sensex and Nifty 50 down roughly 16% and 13% respectively in 2026 so far, making them among the weaker performers globally, behind the Jakarta Composite index, which has fallen near 17%.
In contrast, most Asian peers have held up far better. The Hang Seng index has declined just 1.3%, Shanghai Composite slipped a marginal 0.5%, while Japan's Nikkei 225 has gained about 7%, Taiwan 14.5% and South Korea's Kospi 30%.
Meanwhile, Nasdaq Composite has corrected 10.5%, the S&P 500 declined 7.3%, and Germany's DAX slipped around 8%.
India has underperformed significantly over the last 24 months due to high valuations and for missing out on global themes like artificial intelligence (AI), semiconductors, and electronics, said Viraj Gandhi, chief executive officer of Samco Mutual Fund.
"While current market conditions offer a strong buying opportunity, the old passive playbook of sticking to large-cap indices is unlikely to work," he said, adding that the next phase of wealth creation will come from active stock-picking, spotting newer growth areas outside major indices and staying invested through their growth phase.
Report by Mint
