Mumbai: Indian equity markets witnessed a strong rally on Friday, with benchmark indices posting their biggest single-day gains in recent weeks.
The BSE Sensex surged 1,695.41 points, or 2.30 percent, to close at 75,527.95. During the session, it touched an intraday high of 75,608.02.
The NSE Nifty 50 climbed 461.30 points, or 1.99 percent, to end at 23,622.90 after hitting a day’s high of 23,645.35.
The sharp rise came after a series of global developments improved investor sentiment and reduced concerns over geopolitical risks.
US-Iran Peace Hopes Improve Risk Appetite
The first trigger for the rally came from reports suggesting progress in negotiations between the US and Iran.
Investors welcomed indications that both countries could be moving towards a possible peace agreement, reducing fears of further escalation in the Middle East.
The development eased concerns that had weighed on global markets in recent weeks.
Bloomberg Report Adds to Optimism
Market sentiment received an additional boost after a Bloomberg report cited a G7 official as saying that the US and Iran were close to a peace deal.
According to the report, both sides could sign a memorandum of understanding as early as Sunday.
The possibility of a formal agreement encouraged investors to increase exposure to risk assets, including equities.
Falling Oil Prices Provide Major Relief
Another key factor supporting markets was the decline in crude oil prices.
As hopes of reduced geopolitical tensions increased, Brent crude slipped to around $87 per barrel.
Lower oil prices are positive for India, which imports most of its crude oil requirements. A softer oil market can help reduce import costs, ease inflationary pressures and improve the country's current account position.
Rupee Strengthens, Banking Stocks Lead
The Indian rupee also strengthened against the US dollar, further improving market sentiment.
Banking and financial stocks attracted strong buying interest, helping drive the broader market higher. Investors viewed the combination of lower crude prices, a stronger rupee and reduced geopolitical uncertainty as positive for economic growth and corporate earnings.
The rally reflected renewed confidence on Dalal Street as global risks appeared to ease and investors focused on improving macroeconomic conditions.
Disclaimer: This article is based on market data and publicly available reports. Investors should consult financial advisers before investing.
