Stock markets opened sharply higher on Monday, extending Friday’s rally as signs of a peace agreement between the United States and Iran boosted global investor sentiment and triggered a sharp fall in crude oil prices.
The S&P BSE surged 1,097.05 points, or 1.45%, to 76,625.00 in early trade, while the NSE Nifty50 jumped 333.90 points, or 1.41%, to 23,955.95 as of 9:25 am.
The rally came after US President and ’s deputy foreign minister said an initial agreement had been reached to , easing fears of disruptions to global oil supplies.
Brent crude plunged 4.59% to $83.32 per barrel, while WTI crude fell 5.02% to $80.62 a barrel. The sharp decline in oil prices is a major positive for India, the world’s third-largest oil importer, as it reduces pressure on inflation, the current account deficit and the rupee.
The gains were broad-based, with almost all major sectors trading in positive territory. Nifty Realty emerged as the biggest sectoral gainer, rising 2.75%, followed by Nifty Financial Services, which climbed 1.79%, and Nifty Auto, which advanced 1.94%.
Among Sensex stocks, Eternal was the biggest gainer, rising 3.88%, followed by IndiGo, which jumped 3.79%. Bajaj Finance gained 3.52%, UltraTech Cement rose 3.31%, Bajaj Finserv climbed 3.03%, and Larsen & Toubro advanced 2.86%.
Only a few stocks traded lower, with Bharti Airtel slipping 0.31%, Sun Pharma declining 0.12%, while the broader market also witnessed strong buying. The Nifty Midcap 100 and Nifty Smallcap 100 indices rose 1.35% and 1.36%, respectively.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the sharp correction in Brent crude below the $84 level has significantly improved the outlook for the Indian economy and stock market.
He said lower oil prices could lead to better growth and inflation projections for FY27, while the rupee may continue to strengthen below the 95-per-dollar mark, reducing pressure from foreign investor outflows.
Vijayakumar added that domestic institutional investors and retail investors are likely to drive the market higher, while banks may lead the rally due to attractive valuations and short-covering in private banking stocks.
However, he cautioned that valuations in the broader market remain expensive, with Nifty Midcap and Smallcap indices trading at higher earnings multiples compared with the benchmark Nifty. The better earnings outlook for FY27, however, may continue to support investor interest in these segments.