Equity benchmarks staged a comeback on Wednesday, pulling back from steep morning losses to end marginally in the green, as buying in energy, auto and realty stocks offset persistent pressure from a record-weak rupee and elevated crude oil prices.

"Markets recovered from intraday lows, supported by selective buying in large-cap stocks across autos, financials, and oil & gas... recent fuel price hikes supported sentiment for OMCs and refiners," said Vinod Nair, Head of Research at Geojit Investments.

The BSE Sensex settled at 75,318.39, up 117.54 points or 0.16 per cent, while the Nifty 50 closed at 23,659, gaining 41 points or 0.17 per cent. Both indices had opened sharply lower — the Nifty gapping down 161 points to 23,457 — before recovering nearly 300 points from the session's low of 23,397 to close near the day's high.

Oil & Gas was the standout sector, rallying over 1.5 per cent, driven by IOC, BPCL and Reliance Industries. Investors reacted positively to domestic fuel price hikes and a partial cooling in Brent crude, which eased from above $111–112 earlier in the week toward the $105–106 range during the session.

Auto, realty and PSU banks also ended higher, while media, FMCG and IT remained under pressure. The Nifty Midcap 100 outperformed, rising 0.49 per cent, while the Smallcap 100 ended marginally higher at 0.04 per cent. Market breadth was neutral, with the BSE advance-decline ratio at 1.07.

The rupee, however, offered little comfort. The currency hit a fresh all-time low for the seventh consecutive session, closing at 96.83 against the dollar, with an intraday low of 96.9650 — a level that kept inflation and current account concerns firmly on the radar. "Persistent rupee weakness and elevated crude prices continue to weigh on sentiment due to concerns around inflation and margin pressures," Nair added.

FII flows remained a key overhang. India's FII ownership has fallen to a 14-year low of around 14.7 per cent, with foreign capital rotating toward Taiwan and Korea on the back of AI-driven semiconductor narratives. However, analysts noted early signs of selective re-entry.

"The recent inflows should... be interpreted as the beginning of a tactical re-entry trade, driven by improving relative valuations," said N. ArunaGiri, CEO of TrustLine Holdings, noting India's valuation premium over other emerging markets has moderated from nearly 100 per cent to around 66 per cent.

India VIX declined 1.26 per cent to 18.44, reflecting some easing in anxiety toward the close.

Going into the next session, markets will watch Nvidia's earnings — due Thursday — for cues on global tech and AI sentiment, alongside any developments in the US-Iran situation, which has kept the Strait of Hormuz and crude oil prices on edge.

Domestically, the rupee trajectory and any RBI intervention will remain in focus, with the 23,800 level on Nifty seen as the critical threshold that could determine whether the current recovery extends further.

Published on May 20, 2026