Indian Stocks Surge 900 Points Amid Optimism Over US-Iran Peace Deal

Indian Equity Markets Rally as Crude Oil Prices Plummet

The benchmark equity indices Sensex and Nifty rallied sharply on Monday, supported by a steep fall in crude oil prices and gains in global markets amid improving sentiment around the US-Iran negotiations.

At around 10:45 am, the Sensex jumped 932.38 points or 1.24 percent to 76,347.73, while the broader Nifty advanced to 23,985.50, up 266.20 points or 1.12 percent. All the 16 major sectoral indices were trading in the green, with the Nifty Smallcap100 and Nifty Midcap100 indices rising 1.32 percent and 0.9 percent, respectively.

Shares of oil marketing companies such as BPCL, HPCL, and Indian Oil gained between 4 percent and 4.5 percent. The state-owned fuel retailers also raised diesel and petrol prices for the fourth time this month to offset some losses. Among index heavyweights, HDFC Bank rose 2 percent, while ICICI Bank climbed 1.3 percent.

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Eicher Motors surged 5.7 percent after the automaker reported quarterly profit above estimates, aided by strong demand.

Crude Oil Prices Plummet Below $100

Brent crude, the global oil benchmark, plunged 5.58 percent to USD 97.76 per barrel on prospects of a deal to end the Iran war. The fall brought crude prices below the USD 100-mark for the first time in more than two weeks.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Firm global cues, including gains in Asian markets and US markets ending higher on Friday, also contributed to the rally. Futures of Nasdaq, S&P 500, and Dow Jones rose up to 1.5 percent, indicating a firm opening for US markets later in the day.

Rupee Appreciates Against US Dollar

The rupee appreciated 40 paise to 95.20 against the US dollar on optimism surrounding progress in the US-Iran peace talks despite differences over key issues, including blockades on the Strait of Hormuz.

Easing Geopolitical Concerns

Investor sentiment remained upbeat amid reports that the US and Iran were moving closer to a peace agreement. US President Donald Trump said on Saturday that Washington and Iran had "largely negotiated" a memorandum of understanding on a peace deal that would reopen the Strait of Hormuz, which carried a fifth of global oil and LNG shipments before the war.

India-US Trade Deal Finalisation

US Secretary of State Marco Rubio said the US and India were close to finalising an interim trade agreement after progress in negotiations, with the US Trade Representative expected to visit India soon.

India VIX Declines

India VIX, the market's volatility gauge, declined up to 2.5 percent to 17.38. A fall in the volatility index indicates easing fear among investors and improved risk appetite in the domestic equity market.