Benchmark indices Sensex and Nifty on Wednesday climbed in afternoon trade after trading in a range in early session, thanks to reports suggesting the US-Iran were close to an agreement on a one-page memorandum of understanding (MoU), which could pave way to end the months-long war. Brent crude oil prices plunged 7 per cent, while European markets across the UK, France, Germany and Spain surged over 2 per cent each. The Asian rally led by Korea's Kospi that rose 6.45 per cent for the day. Domestic indices danced to the global tune.

As per the report, the US is seeking an Iranian response on several key points in the next 48 hours. While noting that nothing has been agreed yet, it quoted sources as saying this was the closest the parties had been to an agreement since the war began.

The report came after Donald Trump indicated that “Project Freedom” will be paused temporarily, effectively halting plans to escort vessels through the strait amid ongoing negotiations with Iran. That, analysts said, offered some near-term respite. Brent oil futures for July delivery were trading at $102.61 per barrel, down $7.26 or 6.61 per cent.

At 2.45 pm, the BSE Sensex was trading at 77,996.69, 978.90 points or 1.27 per cent. Nifty was quoting at 24,339.30, up 306.50 points or 1.28 per cent. The gains were made, thanks to sharp buying interest in index heavyweight financials such as HDFC Bank, ICICI Bank, State Bank of India  and Axis Bank.

InterGlobe Aviation led the Sensex rise, as the stock surged 7 per cent to Rs 4,539.35. It was followed by Trent, SBI, HDFC Bank, Eternal and Asian Paints that gained 3-4 per cent. M&M, Axis Bank and ICICI Bank rose over 2.5 per cent each.

"4QFY26 results are largely on expected lines and have resulted in marginal cuts so far in KIE and consensus earnings estimates. We note that underlying trends have been relatively resilient across most sectors until now," Kotak Institutional Equities said, adding that valuations of the Indian market are in the fair zone, relative to recent history and bond yields.