Equity benchmark indices rallied sharply in early trade on Monday, with the Sensex surging over 1,290 points and the Nifty 50 reclaiming the 24,000 mark, as easing geopolitical tensions in West Asia and a sharp decline in crude oil prices boosted investor sentiment.
The BSE Sensex jumped 1,293 points to cross the 76,800 level, while the Nifty 50 advanced 388.5 points to touch 24,000. The rally was driven by news of an imminent peace agreement between the United States and Iran, which includes the reopening of the Strait of Hormuz to commercial shipping traffic. The development has eased concerns over global oil supplies, dragging Brent crude prices down from $86 per barrel on Friday to around $83-84 per barrel in early Monday trade.
Positive cues from Asian markets and firm indications from US futures, which pointed to gains of more than 1 per cent, further supported risk appetite.
At 9.42 am, Sensex traded 1082.95 points or 1.43 per cent higher at 76,610.90, and Nifty 50 zoomed 331.90 points or 1.40 per cent to 23,954.80.
The broader market also participated in the rally, with both midcap and smallcap indices rising more than 1 per cent. The India VIX, a measure of market volatility, declined nearly 4 per cent to 14.19, indicating easing risk perceptions among investors.
Realty, banking, financials shine
Sectorally, realty, financial and banking stocks led the gains, while all sectoral indices except pharma and healthcare traded in positive territory. Among Nifty 50 constituents, TMPV, Shriram Finance, Eternal, InterGlobe Aviation and Bajaj Finance and Bajaj Finserv were among the top gainers. On the other hand, Apollo Hospitals, Cipla, ONGC and Sun Pharma traded lower.
Market breadth remained firmly positive. Of the 3,615 stocks traded on the BSE, 2,865 advanced, 554 declined and 196 remained unchanged. As many as 97 stocks hit their 52-week highs, while 28 touched 52-week lows. Additionally, 143 stocks were locked in the upper circuit and 74 hit the lower circuit.
Midcap and smallcap movers
Within the midcap segment, L&T Finance, Ashok Leyland, Swiggy and Godrej Properties surged 4-6 per cent. In contrast, GE Vernova T&D, Aurobindo Pharma, Biocon and Tata Communications slipped up to 2 per cent.
Among smallcap counters, Five-Star Business Finance, Force Motors, MRPL and Aditya Birla Real Estate gained 5-7 per cent, while Data Patterns, Wockhardt, HSCL and Syngene International declined 1-4 per cent.
On the BSE, Ashoka Buildcon, TBO Tek, Aurionpro Solutions and Renuka Sugars rallied 8-9 per cent, whereas Data Patterns, Paras Defence, Supriya Lifescience and Emcure Pharmaceuticals fell 2-4 per cent.
Peace deal boosts rupee outlook; experts see improving market prospects
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said the sharp correction in crude oil prices following signs of peace in West Asia has significantly improved the outlook for the Indian economy and equity markets.
“With the dawn of peace in West Asia, hopefully, and the consequent sharp correction in Brent crude to below $84 in early trade, the prospects for the Indian economy and stock market have turned for the better. The GDP growth rate and CPI inflation projections for FY 27 can be revised in this changed scenario to 6.9% and 4.6% respectively. This will have positive implications for the stock market,” he said.
He added that the rupee is likely to strengthen further, helping stabilise foreign portfolio flows. According to Vijayakumar, domestic investors and institutions are expected to drive markets higher, with banking stocks likely to lead gains due to attractive valuations and continued short covering in large private-sector lenders.
While noting that broader market valuations remain elevated, he said stronger Q4 FY26 performance and improved earnings prospects for FY27 could continue to attract investor interest in midcap and smallcap stocks.
Meanwhile, the Indian rupee traded with a positive bias, with USD/INR hovering around 94.67 after opening with a bearish gap. The domestic currency was supported by lower crude oil prices, softer US dollar sentiment, declining US Treasury yields and improving risk appetite across Asian markets.
Kaveri More, Commodity Technical Analyst at Choice Broking, said lower oil prices are particularly beneficial for India as they help reduce the country’s import bill and ease pressure on the current account deficit. She added that inflation remained contained at 3.9 per cent in May, below the Reserve Bank of India’s 4 per cent target, while recent RBI measures aimed at attracting dollar inflows could provide additional support to the rupee. However, she cautioned that markets would closely track the upcoming US Federal Reserve policy decision and comments from Chair Kevin Warsh for clues on the future interest rate trajectory.