Stock markets witnessed their strongest rally in nearly two months on Friday, with the Sensex soaring over 1,600 points and the Nifty gaining nearly 2%, as a sharp fall in crude oil prices after hopes of a peace agreement between the United States and Iran lifted investor sentiment.
The S&P BSE surged 1,695.40 points, or 2.30%, to close at 75,527.95, while the NSE Nifty50 jumped 461.30 points, or 1.99%, to settle at 23,622.90.
The rally came after US President Donald Trump said that a peace deal with Iran could be signed as early as this weekend, raising hopes that the Strait of Hormuz could reopen and easing fears of disruptions to global oil supplies.
Brent crude fell sharply by 3.84% to $86.91 per barrel, slipping below the key $90 mark, while WTI crude dropped 3.97% to $84.23 per barrel.
The decline in crude prices was a major relief for India, which imports over 80% of its oil requirements. Lower oil prices reduce inflationary pressure, support the rupee and improve the country’s overall macroeconomic outlook.
The rally was broad-based, with all major sectors ending in the green.
Nifty Realty emerged as the biggest sectoral gainer, climbing 3.53%. Nifty Financial Services rose 3.01%, Nifty Private Bank gained 2.84%, while Nifty PSU Bank advanced 2.71%.
Nifty Consumer Durables jumped 2.38%, Nifty Midcap 100 gained 2.43% and Nifty Smallcap 100 rose 2.80%, indicating strong buying across broader markets.
Among Sensex stocks, Bajaj Finance was the biggest gainer, surging 5.56%, followed by Larsen & Toubro, which climbed 4.94%. IndiGo rose 4.59%, Titan gained 4.03% and HDFC Bank advanced 3.73%.
Eternal jumped 3.63%, Axis Bank gained 2.92%, Bajaj Finserv rose 2.69% and Kotak Mahindra Bank climbed 2.61%.
Only Tech Mahindra closed in the red, declining 2.24%, while most other heavyweight stocks ended with gains.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd, said the rally was driven by easing geopolitical concerns, falling oil prices and positive global cues.
He said signs of progress in US-Iran negotiations reduced geopolitical risks and improved global risk appetite, prompting investors to return to equities.
“The resulting decline in crude oil prices is especially beneficial for India, as it helps ease inflationary pressures and improves the country’s macroeconomic outlook,” Gour said.
He added that a stable rupee, comfortable liquidity conditions and broad-based buying in banking, auto, real estate and midcap stocks further strengthened investor sentiment.
However, he cautioned that investors should continue to track crude oil prices, geopolitical developments, global interest rates and foreign investor flows, as some consolidation after the sharp rally cannot be ruled out.
According to Gour, Nifty has formed a strong base around the 23,070 level and has managed to close above its 20-day moving average, indicating improving short-term momentum.
On the upside, 23,725 and 23,800 will act as immediate resistance levels. A decisive move above 23,800 could open the doors for a rally towards 24,000 and 24,200.
On the downside, 23,250 and 23,150 remain important support levels.
Bank Nifty continues to outperform the broader market and is expected to challenge the 57,000 mark in the near term. The resistance zone is placed between 57,000 and 57,450, while 56,000 and 55,555 will be key support levels.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)