Benchmark equity indices Sensex and Nifty rallied sharply on Monday, tracking strong gains in global markets and a steep fall in crude oil prices following a peace agreement between the United States and Iran, which ended their 107-day conflict and reopened the strategic Strait of Hormuz.
The Sensex surged 1,110 points or 1.47% to 76,638, while the Nifty rose 320 points or 1.35% to 23,942.
Broader markets also participated in the rally, with the Nifty Smallcap 100 and Nifty Midcap 100 indices advancing 1.62% and 1.43%, respectively. All sectoral indices on the NSE were trading in positive territory.
HDFC Bank led gains among heavyweight stocks, rising 2%. Analysts noted that the Reserve Bank of India’s new NRI deposit scheme could benefit the bank by attracting long-term foreign currency inflows, improving liquidity and easing margin pressure. Infrastructure major Larsen & Toubro gained 3.2%, supported by its significant exposure to West Asia.
Oil marketing companies, tyre manufacturers, paint companies, and airlines also rallied as falling crude prices improved cost outlooks. Brent crude dropped 4.55% to USD 83.36 per barrel after the peace agreement eased supply concerns in global energy markets.
The US–Iran deal, signed in Switzerland and announced by US President Donald Trump, ended a prolonged conflict and ensured the reopening of the Strait of Hormuz, through which nearly one-fifth of global oil flows. The development significantly reduced geopolitical risk in energy markets.
Lower crude prices are seen as positive for India, the world’s third-largest oil importer, as they ease inflationary pressure, improve the trade deficit, and support the rupee.
Global markets also reacted positively, with Asian indices such as South Korea’s Kospi and Japan’s Nikkei surging sharply, while US markets closed higher on Friday.
The rupee strengthened by 58 paise to 94.60 against the US dollar, aided by a weaker greenback and strong domestic equity inflows. Meanwhile, the India VIX fell 4% to 14.18, signalling reduced market volatility and improving investor risk appetite.
