Indian and global equities are rebounding sharply despite lingering West Asia conflict risks and elevated inflation, with investors betting on de-escalation and steady supply chains.
The Sensex surged over 800 points Friday to reclaim 77,000+ while Nifty crossed 24,000, unlocking ₹5 lakh crore in market cap, fueled by US-Iran truce signals easing crude pressures below $100/barrel and RBI’s measured liquidity stance.
Key Resilience Factors
- Geopolitical Relief: Hormuz talks reduce oil shock fears; prior war spikes added 2% CPI in developed markets via energy/food disruptions, but current truce caps imported inflation.
- Monetary Tightrope: Central banks face dual mandate—dampen war-driven inflation (e.g., 62% CPI rise post-conflict historically) without stifling growth; India’s VIX dip signals risk appetite return.
- Sector Rotation: Banks, metals gain on short-covering; war often erodes fixed income via rate hikes but boosts defense/commodities short-term.
Analysts see sustained upside to Nifty 24,500 if ceasefire holds, though Q4 earnings and Hormuz flows remain pivotal.
