Indian equity benchmarks staged a strong rebound in Wednesday's trade after witnessing a sharp decline in the previous session, aided by easing crude oil prices and improving investor sentiment.

At last check, the 30-share BSE Sensex pack was up 892.08 points or 1.17 per cent at 77,092.76, while the NSE Nifty50 pack gained 230.10 points or 0.97 per cent to 24,054.20.

The broader indices also remained positive, with Nifty Midcap100 rising 0.18 per cent and Nifty Smallcap100 advancing 0.26 per cent.

Among the major contributors to the Sensex rally were HDFC Bank, ICICI Bank, Infosys, Bajaj Finance, Reliance Industries (RIL), State Bank of India (SBI), Tata Consultancy Services (TCS), Axis Bank, InterGlobe Aviation (IndiGo's parent) and Trent.

Easing crude oil prices

Market expert Daljeet Kohli attributed much of the recovery in domestic equities to the continued decline in Brent crude oil prices, which slipped below $66 per barrel.

"The market is expected to remain volatile in the near term. Going all-in is not advisable at current levels. Investors should adopt a staggered approach while taking positions," Kohli told Business Today.

He added that sectors such as pharmaceuticals, chemicals and specialty chemicals could benefit going ahead.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, also said that the decline in crude oil prices is supporting domestic markets.

Has the pace of FII selling slowed down?

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said foreign institutional investor (FII) selling appears to be moderating as the Indian rupee stabilises.

With the Indian rupee stabilising, FII selling appears to have tapered off, which is positive for the market, he stated.

Global trends, outlook

South Korea's benchmark KOSPI index rebounded on Wednesday, aided by gains in Samsung Electronics.

Commenting on global market trends, Vijayakumar said, "Excessive volatility will continue in semiconductor stocks and markets like South Korea and Taiwan. Sharp rallies will trigger profit booking, while sharp corrections will encourage buying. The profitability of these companies will continue to be excellent. However, concentration risks are high. This means high volatility will continue."

"Investors can align their portfolios to adjust to this emerging risk. Sectors like FMCG and entry-level two-wheelers could be impacted by a decline in rural income. Pharmaceuticals, with their relatively inelastic demand, are likely to remain resilient and may even outperform in a monsoon-deficient scenario," Vijayakumar further stated.