The BSE Sensex climbed 2,700 points to 77,325.58 and NSE’s Nifty 50 jumped almost 800 points to 23,922.
Indian markets jumped by over 3 per cent on Wednesday after US President Donald Trump announced a two-week suspension of military strikes against Iran just hours before his deadline. Iran agreed to allow safe navigation through the Strait of Hormuz during the ceasefire, triggering sweeping market moves across oil, equities, currencies and crypto.
Buoyed by the announcement, the benchmark Sensex rallied by 3.5 per cent, around 2,682 points, to 77,337,71 in the opening session at 9.20 am IST. The NSE Nifty index spurted by 3.39 per cent to 23,907.15, a gain of 783 points across the board on buying support. All sectoral indices, mid cap and small cap indices also gained ground.
The ceasefire between the US and Iran has dramatically altered the near-term market scenario. The crash in Brent crude to $ 95 following the ceasefire will again turn the market bullish. This ceasefire, particularly the agreed reopening of Hormuz Strait, will embolden the bulls to charge again, aided by the fair market valuations, analysts said.
WTI Crude Oil tumbled as much as 17% to below $100 per barrel following the ceasefire announcement. Oil had surged above $115 earlier in the session after reports of strikes on Iran’s Kharg Island — the hub of roughly 90% of Iran’s oil exports — before the diplomatic breakthrough reversed the move, according to Devarsh Vakil, Head of Prime Research at HDFC Securities. “If the war stops after two weeks, there’s no looking back for the markets. It will regain the losses suffered in the last one month,” said an analyst.
The rupee also opened strong and was at 92.63 against the dollar in the morning session as against 93.01 on Friday.
Global cues have turned firmly supportive. US markets have moved higher, while Asian markets like Japan and South Korea are witnessing sharp gains, indicating a broad-based risk-on sentiment. The easing of geopolitical stress has led to a sharp fall in global crude oil prices, which is particularly positive for India from both inflation and currency perspectives.
On Wall Street, S&P 500 futures jumped 2.2% to 6,804, Nasdaq futures rallied 2.7%, and Dow futures surged 2%, as investors priced in hopes of a durable peace deal and resumption of Gulf oil flows.
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Hariprasad K, Research Analyst and Founder, Livelo, said the key trigger is the announcement of a two-week pause in US military action, alongside Iran’s agreement to facilitate safe passage through the Strait of Hormuz. This has significantly reduced immediate concerns around energy supply disruptions, which had been a major overhang for global markets.
Volatility, which eased by 19 per cent in the opening session, is likely to ease in today’s session. India VIX, which closed near 24.7 on Friday, may see further cooling as fear unwinds, leading to some moderation in option premiums and improved trading conditions.
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