Indian Stock Market Rallies 1,300 Points in Three Sessions Amid US-Iran Conflict De-escalation

Indian Stock Market Rises on Optimism of US-Iran Peace Talks

The Indian stock market continued its upward trend on Tuesday, 21 April, with the equity benchmark Sensex rising by nearly 800 points, or 1%, to an intraday high of 79,293. The NSE counterpart Nifty 50 gained over 200 points, or almost 1%, to 24,571 during the session. This marks a three consecutive session of gains, with the 30-share pack rising by over 1,300 points, or 1.7%, and the Nifty 50 moving up by nearly 400 points, or 1.5%, since Friday, 17 April.

The key driver behind the rise in the market is optimism surrounding the possible US-Iran peace talks. According to media reports, the US-Iran peace talks may take place in Pakistan over the next few days. US Vice President JD Vance may leave for Islamabad by Tuesday morning to resume negotiations with Iran as the two-week ceasefire announced on 7 April will expire on 21 April. If a peace deal is reached, it is expected to drive crude oil prices lower, eliminating key macroeconomic headwinds from the Indian economy and the stock market.

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Market experts expect the Sensex and the Nifty 50 to rise further by about 10% from the current levels if the US and Iran declare a final end to their conflict. The decline in the intensity of foreign capital outflow is another comforting factor, with FII selling in April so far standing at ₹58,488 crore, compared to ₹1,25,736 crore in March.

Pankaj Pandey, the head of research at ICICI Securities, believes that the market can sustain this rally once a truce is finalised. Vinod Nair, Head of Research at Geojit Investments, expects the Nifty 50 to reach 25,000-plus kind of levels if a final peace deal is announced. Ajit Mishra, SVP of Research at Religare Broking, sees the possibility of Sensex rising to the 85,000 mark if the US and Iran agree to a final deal and crude oil prices drop sharply.

Nair expects Q1 earnings to be mostly in line, though expectations are more muted compared to the third quarter. He believes that even with a 2-3% earnings cut for FY27 and a 5% downgrade in valuation for India, the Nifty 50 can still reach 27,000 by December.