Sensex, Nifty 50 Stage Sharp Rebound Mid-Session, Recovering Early Losses Amid Geopolitical Tensions

Benchmark indices snapped their five-day losing streak to end higher on January 12, against expectations. Both the Sensex and Nifty 50 opened lower after US President Donald Trump’s warning of “very strong” military actions against Iran over a deadly crackdown on protestors in the turmoil-stricken Middle Eastern country. Iran, on the other hand, also vowed to retaliate. However, after a few hours into the trade, the headline indices staged a sharp rebound, recovering morning decline and almost half of the previous session’s losses to end in green.

At close, Sensex was at 83,878.17, up 301.93 points, or 0.36 per cent, and Nifty 50 was at 25,790.25, up 106.96 points, or 0.42 per cent.

The broader market indices, however, failed to rebound as much as the benchmarks did and eventually ended in the red. The Nifty Midcap 100 closed flat, with a slight 0.05 per cent negative bias after plunging over 1.50 per cent in early trade. The Nifty Smallcap 100 ended 0.52 per cent lower after it tumbled nearly 2 per cent during the day.

Nifty 500, which represents more than 92 per cent of the total free-float market cap of all the NSE-listed stocks, settled with 0.18 per cent gains.

Iran is currently witnessing widespread, nationwide protests against the Ayatollah Ali Khameinei-led theocratic regime, which emerged largely out of deep economic distress and rising living costs. Iran’s attorney general Mohammad Movahedi Azad warned that protesters would be treated as “enemies of God”, an offence that carries the death penalty under Iranian law.

According to media reports, at least 544 protestors have been killed in the crackdown so far. The US involvement would trigger a wider conflict in the region, which could be negative for domestic equity markets.

Metals Emerge Outlier

Media, realty, pharma, auto and consumer durables stocks were hammered during the session, while metal stocks emerged as winners. Nifty Media and Nifty Realty closed 1.55 per cent and 1.22 per cent lower, respectively, while on the other hand, the Nifty Metal jumped nearly 2 per cent, led by a rally in Hindustan Copper and Hindustan Zinc, which surged 5.13 per cent and 3.86 per cent, respectively.

Oil and gas, FMCG, banks and financial services were other sectors which ended higher.

Nifty Bank, which tracks the 12 most valuable and actively traded banking stocks, ended 198.95 points, or 0.34 per cent, higher at 59,450.50.

Nifty 50: Top Gainers & Losers

Among the Nifty 50 stocks, Coal India jumped 3.39 per cent, Tata Steel surged 2.75 per cent, Asian Paints rose 2.50 per cent, JSW Steel advanced 2.26 per cent, and Hindalco gained 2.21 per cent. Trent, UltraTech Cement, Hindustan Unilever, State Bank of India, Tata Consumer Products, ICICI Bank, Tata Consultancy Services (TCS), Adani Enterprises, Nestle India, SBI Life Insurance and Grasim Industries gained between 1 per cent and 2 per cent.

Capping the gains on the 50-share index, Infosys, Tata Motors Passenger Vehicle, and Bajaj Finance fell 1 per cent each. Bajaj Auto, Eicher Motors, and Shriram Finance also closed in the red.

Stock Market Outlook: What To Watch Next

The key trigger when trading resumes on January 13 will be the ongoing US-Iran tensions. Any escalation could create ripple effects across the globe, including India. The Strait of Hormuz is back in focus as the possibility of US intervention in Iran could prompt Iran to cut one of the world’s most important energy routes. This could induce volatility in crude oil markets, which eventually will impact domestic equities as well.

The next trigger is quarterly earnings for the period ended December 31, 2025 (Q3FY26). On January 12, post-market hours, TCS and HCL Tech reported their numbers, which the markets will factor in during the next session. On January 13, as many as 23 BSE-listed companies are set to report their earnings, including ICICI Prudential Life Insurance, Indian Bank, Maharashtra Bank, and Tata Elxsi.