Indian equity markets witnessed a powerful rally on Monday as investors responded positively to easing geopolitical tensions in West Asia after the United States and Iran reached a peace agreement, bringing an end to their 107-day conflict and restoring shipping activity through the crucial Strait of Hormuz.
The benchmark BSE Sensex jumped 1,110 points, or 1.47 per cent, to close at 76,638, while the NSE Nifty advanced 320 points, or 1.35 per cent, to 23,942. The upbeat sentiment extended across the broader market, with midcap and smallcap stocks also recording healthy gains.
Buying interest remained widespread as every major sectoral index on the NSE traded in the green. Market participants welcomed the sharp decline in crude oil prices, which is expected to ease cost pressures for several industries and improve India’s macroeconomic outlook.
Among frontline stocks, HDFC Bank emerged as one of the top performers, gaining around 2 per cent. Market experts believe the Reserve Bank of India’s recently announced NRI deposit framework could help banks attract stable foreign currency deposits, strengthening liquidity conditions.
Engineering and infrastructure giant Larsen & Toubro also posted strong gains of over 3 per cent, supported by investor optimism surrounding its significant business exposure in West Asian markets.
Companies dependent on crude oil prices, including airlines, paint manufacturers, tyre makers and oil marketing firms, witnessed strong buying after Brent crude slid nearly 4.6 per cent to around USD 83.36 per barrel. The fall in oil prices followed reduced concerns over supply disruptions after the reopening of the Strait of Hormuz.
The peace accord, finalised in Switzerland and announced by US President Donald Trump, has significantly lowered fears of prolonged instability in one of the world’s most important energy corridors. Nearly 20 per cent of global oil shipments pass through the Strait of Hormuz, making its uninterrupted operation vital for international energy markets.
For India, which relies heavily on imported crude oil, softer oil prices are expected to support economic stability by easing inflationary pressures, narrowing the trade deficit and providing support to the domestic currency.
Global markets mirrored the optimism, with major Asian indices posting strong gains, while Wall Street had already ended the previous session on a positive note.
The Indian rupee also strengthened sharply, rising 58 paise to 94.60 against the US dollar. At the same time, the India VIX, often referred to as the market’s fear gauge, declined 4 per cent to 14.18, indicating improving investor confidence and a reduced perception of near-term market risk.
