Stock markets witnessed a sharp rally on Monday, with the Sensex rising over 1,100 points and the Nifty nearing the crucial 24,000 mark. This was boosted by investor confidence due to a breakthrough in the US-Iran dispute and a sharp drop in crude oil prices.
The S&P BSE Sensex rose 1,137.66 points, or 1.51%, to 76,665.61 in early trade, while the NSE Nifty50 rose 349.75 points, or 1.48%, to 23,972.65.
The rally was widespread, with strong buying seen in banks, automobiles, real estate, financial services, and major market stocks.
US-Iran Peace Deal Brings Relief to Markets
The biggest trigger behind today’s rally was a potential peace agreement between the US and Iran. The two countries indicated that a preliminary deal had been reached to end the fighting and resume shipping through the Strait of Hormuz, alleviating fears of a prolonged disruption to global oil supplies.
The easing of geopolitical tensions led to a strong rally in global markets and a sharp recovery in crude oil prices.
Brent crude fell nearly 5% to $83.32 per barrel, while WTI crude fell more than 5% to $80.62 per barrel. For India, which imports most of its crude oil needs, lower oil prices are a major positive as they reduce inflation pressure, improve the current account balance, and support the rupee.