NEW DELHI: After a dismal week, India’s equity market snapped its losing streak on Monday as easing geopolitical tension in West Asia and softening crude oil prices lifted investors’ sentiment. The benchmark index - BSE Sensex gained 776.01 points or 1.02% to settle at 76,835.78, while the NSE Nifty 50 advanced 228.50 points or 0.96% to close at 23,995.95.
Brent crude oil prices fell more than 10% on Monday to below $88 a barrel amid a pause in military strikes between the US and Iran after briefly hitting $100/barrel on Friday. The rise in oil prices, coupled with a falling rupee, relentless selling by the foreign institutional investors (FIIs) and US tariff-related uncertainties, had led to a 2-3% decline in benchmark indices last week.
Monday’s gain added nearly Rs 5 lakh crore to investors’ kitty. As per BSE data, the all-India market capitalisation stood at Rs 480.8 lakh crore on Monday from Rs 475.6 lakh crore in the previous session.
Commenting on the markets' closing trend on Monday, Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services, said that Indian equities are witnessing a short-term relief, as de-escalation in West Asia and the resultant fall in crude oil prices provided interim support, adding that the investor sentiment also improved on expectations that the US Federal Reserve will keep policy rates unchanged.
Iran and the US had earlier agreed on a ceasefire, but hostilities resumed two weeks ago as both countries battled over control of the Strait of Hormuz, a vital checkpoint for oil and gas. As per reports, US President Donald Trump has paused attacks on Iran for the third night in a row to give space to peace talks.
Khemka added that going ahead, geopolitical developments and direction in crude oil prices are likely to be key drivers in the near term.
On the sectoral front, Nifty Media, Nifty IT, and Nifty Realty climbed more than 2% each on Monday. In the broader market, the Nifty Midcap 100 index gained 1.0%, while the Nifty Small Cap 100 index advanced 1.3%. Among Nifty constituents, Eternal, Indigo, and Infosys emerged as top gainers, while ONGC, HDFC Life, and HDFC Bank lagged.
Vinod Nair, Head of Research, Geojit Investments said that key central bank policy meetings this week, led by the Fed, BoE, and BoJ, may provide greater flexibility to maintain the status quo on interest rates. On the domestic front, a narrowing rainfall deficit is adding comfort to the inflation outlook, supported by better-than-expected Q1 earnings and a positive business outlook, he added.
Meanwhile, the rupee strengthened sharply on Monday, appreciating around 0.67% to trade near 95.90.