Indian Markets Rebound Despite US-Iran Military Escalation

Indian benchmark indices recovered on July 9, 2026, following a sharp sell-off triggered by escalating hostilities between the United States and Iran. The BSE Sensex rose 238.22 points to close at 76,741.82, while the NSE Nifty increased by 80.75 points to settle at 23,962.80. Mid-cap and small-cap indices outperformed the benchmarks, with the Nifty Midcap 100 and Nifty Smallcap 100 rising 1.4% and 1.8% respectively.

The volatility followed a declaration by Donald Trump that an interim agreement with Iran had ended, coinciding with U.S. military strikes hitting approximately 90 targets across Iran over two days. These actions were responses to Iranian attacks on Gulf states. While crude oil prices initially spiked due to concerns over the Strait of Hormuz, Brent crude later fell to $77.24 a barrel after OPEC+ agreed to expand production. Trump stated that the flare-up "will end very quickly," which helped stabilize investor sentiment.

Market recovery was supported by foreign institutional investor inflows of Rs 1,962.80 crore and broad-based buying in realty, consumer durables, and PSU banking sectors. Sun Pharmaceutical Industries and Bharti Airtel were top gainers, while Dr. Reddy's Laboratories fell nearly 6% due to specification issues with Semaglutide batches. Despite the gains, analysts noted a cautious atmosphere due to ongoing geopolitical instability and inflation concerns from the US Federal Reserve.