Benchmark stock market indices ended a five-session losing streak on Monday, with the Sensex jumping more than 770 points and the Nifty closing just below the 24,000 mark. The rally was driven by a sharp decline in crude oil prices after the US and Iran paused military strikes, lifting investor sentiment.
The BSE Sensex advanced 776.01 points, or 1.02%, to settle at 76,835.78, while the NSE Nifty50 gained 228.50 points, or 0.96%, to close at 23,995.95.
Buying was broad-based, with IT, media, realty, auto and healthcare stocks leading the gains. Broader markets also outperformed the benchmarks, while India VIX, the market's volatility gauge, dropped nearly 10%, signalling reduced investor anxiety.
Crude oil slump boosts markets
The primary catalyst for the rally was the steep fall in oil prices after the United States and Iran halted military action over the weekend, easing concerns about a prolonged conflict in West Asia.
Brent crude dropped 9.44% to $87.64 a barrel, while WTI crude fell 7.93% to $82.23. Lower crude prices are generally positive for India, as they help ease inflation, improve the fiscal outlook and reduce input costs for businesses.
IT, media and realty lead gains
Among sectoral indices, Nifty Media topped the chart with a gain of 2.39%, followed by Nifty IT at 2.34% and Nifty Realty at 2.28%. Nifty Auto also posted strong gains, rising 1.60%.
Healthcare, FMCG and financial services stocks also ended higher, reflecting widespread participation in the rally.
Among Sensex constituents, Eternal surged 5.63%, while InterGlobe Aviation (IndiGo), Infosys, Bajaj Finance, Asian Paints, Mahindra & Mahindra, Bajaj Finserv and HCLTech were among the biggest gainers. HDFC Bank, Power Grid and Axis Bank were among the few stocks that ended in the red.
The broader market also remained upbeat. The Nifty Midcap 50 climbed 1.28%, the Nifty Smallcap 100 rose 1.31%, and the Nifty 500 gained 1.05%.
Volatility eases
Investor confidence improved significantly, with India VIX falling 9.76%, indicating expectations of lower market volatility following the easing of geopolitical tensions.
Vinod Nair, Head of Research at Geojit Investments Limited, said the pause in hostilities in West Asia had considerably improved market sentiment.
"A pause in strikes in West Asia has eased concerns over rising import costs and inflation, triggering a relief rally in markets. The sharp correction in crude oil prices, along with a decline in long-term bond yields, has also raised hopes of a durable resolution, supported by signs of long unwinding," he said.
Focus shifts to central bank meetings
Analysts said investor attention will now turn to monetary policy decisions from the US Federal Reserve, the Bank of England and the Bank of Japan later this week for signals on the global interest rate outlook.
They added that domestic corporate earnings and movements in crude oil prices will remain key factors influencing market direction in the coming sessions.
