Sensex surges 500 pts, Nifty near 25,400 amid easing Middle East tensions; Bank Nifty hits new record high

Jio Financial Services, Bajaj Finance, Eternal, Adani Ports, and Bharti Airtel were the top gainers on the Nifty.

Benchmark indices Sensex and Nifty traded strong through the afternoon, on track for a third straight day of gains, driven by a sharp rally in oil & gas and banking stocks. The Nifty Bank index even touched a record high in intraday trade. However, the broader market lost momentum, breaking its multi-session winning streak, as volatility inched higher on account of the monthly F&O expiry.

At 12:05 pm,  the Sensex was up 509.12 points or 0.62 percent at 83,264.63, and the Nifty was up 143.15 points or 0.57 percent at 25,387.90. About 1636 shares advanced, 1729 shares declined, and 127 shares remained unchanged.

"With a ceasefire between Israel and Iran, global markets are in a risk-on mode. But since the reciprocal tariff issue remains to be addressed, a sustained rally would be difficult. The market focus in the near-term will be on what transpires around July 9th when the 90-day pause of the reciprocal tariff ends. Which countries will succeed in negotiating bilateral trade deals with the US will be keenly watched. Positive news on a potential India-US deal will be a shot in the arm for the market. Disappointment on this front will constrain the rally," V K Vijayakumar, Chief Strategist at Geojit Investments Limited, said.

Sectoral performance was mixed on Thursday, with notable weakness in select pockets. Nifty Realty led the losers with a sharp 1.96 percent drop, followed by Nifty Pharma, which slipped 0.49 percent. Nifty IT and PSU Bank indices also ended in the red. Meanwhile, gains were seen in Nifty Oil & Gas, which rose 0.90 percent, and Nifty Infra, up 0.60 percent. Nifty Energy and Metal added 0.46 percent and 0.37 percent, respectively. Among the broader indices, the Nifty Smallcap 100 and Midcap 100 saw marginal declines, ending down 0.08 percent and 0.09 percent. India VIX edged higher by 1.54 percent, indicating a slight rise in market volatility.

One Mobikwik Systems Ltd share soared over 12 percent after 9 percent equity in the firm, worth Rs 168 crore, was exchanged in the block deal window on Thursday, June 26.  Net1 Applied Technologies Netherlands BV, an arm of South Africa’s Net1 UEPS Technologies, was preparing to offload around 8 percent of its holdings in the firm, CNBC TV-18 reported.

Defence stocks, after a two-day lull, rose as North Atlantic Treaty Organisation (NATO) allies planned to increase their defence spending to five percent of their gross domestic product (GDP) by 2035. NATO leaders agreed to the massive hike, from two percent of GDP to five percent, following strong pressure from U.S. President Donald Trump, and expressed their “ironclad commitment” to come to each other's aid if attacked.

Shares of Interglobe Aviation extended gains for a fifth straight session after B&K Securities initiated coverage with a buy rating, citing India's robust, underpenetrated air travel market. B&K expects sustained demand-supply imbalance due to ongoing aircraft supply constraints, which should support fares and profitability.

"The nifty continued its near-term rally yesterday, rising 200 points. Technically speaking, the price action also traced an inside day, which means that the possibility of a large, single-day, trending move is rising. Immediate resistance sits inside the 25,310 - 25,360 zone and higher at 25,500, while immediate support rests between 24,960 and 25,010. Below this, 24,800 is the level bulls must defend if a visit into the 25,500 - 25,800 area is coming," says Akshay Chinchalkar, Head of Research at Axis Securities.

Jio Financial Services, Bajaj Finance, Eternal, Adani Ports, and Bharti Airtel were the top gainers on the Nifty. Laggards on the index included Dr Reddy's, Sun Pharma, SBI, Eicher Motors, and Hero MotoCorp.