Sensex surges 1,700 points, Nifty tops 23,600 as easing Iran tensions spark broad-based rally
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Indian equity benchmarks posted their strongest gains in weeks on Friday, buoyed by easing geopolitical tensions in the Middle East, a sharp decline in crude oil prices and positive global cues.
The BSE Sensex jumped 1,695.40 points, or 2.30%, to close at 75,527.95, while the NSE Nifty 50 advanced 461.30 points, or 1.99%, to settle at 23,622.90. The Nifty reclaimed and sustained above the 23,500 level after trading below the mark for nearly a week.
The rally was broad-based, with banking, financial, auto, realty and consumption-oriented stocks leading the gains. Market volatility also eased, with India VIX, the market's fear gauge, falling 5.16% to 14.81.
Hopes of US-Iran breakthrough lift sentiment
Investor sentiment improved after reports suggested progress in diplomatic discussions between the US and Iran, easing concerns over disruptions to global energy supplies.
Iranian state-linked news agency Mehr reported that a proposed memorandum of understanding between Tehran and Washington includes the lifting of sanctions, an end to the US naval blockade at the Strait of Hormuz and the withdrawal of American military forces positioned around Iran.
Adding to the optimism, US President Donald Trump said a deal to end the conflict with Iran was nearly complete and could be signed over the weekend in Europe. Trump later claimed that the US had ended the war and that Iran had agreed never to develop a nuclear weapon.
The developments triggered a sharp decline in crude oil prices and supported a risk-on sentiment across global markets.
Crude falls, rupee strengthens
Brent crude, the global oil benchmark, fell about 5% to $86.98 per barrel.
Lower oil prices are positive for India as they help reduce the import bill, ease pressure on the current account deficit and contain inflationary pressures.
Reflecting the improved outlook, the rupee surged 72 paise to settle provisionally at 95.13 against the US dollar.
Financials spearhead rally
Among the Nifty gainers, Shriram Finance surged 8.10% to ₹958, followed by Bajaj Finance , which rose 5.68% to ₹920. Larsen & Toubro gained 4.87% to ₹4,050, while IndusInd Bank advanced 4.50%.
Titan Company climbed 3.82%, HDFC Bank gained 3.67%, Jio Financial Services rose 3.64% and Bajaj Finserv added 2.84%. Kotak Mahindra Bank , Axis Bank , Reliance Industries , UltraTech Cement , Bharti Airtel and HDFC Life Insurance also ended with strong gains.
On the losing side, Nestle India declined 3.23%, ONGC fell 2.24% and Tech Mahindra lost 2.18%. SBI Life Insurance, Tata Consumer Products , Power Grid and Coal India also closed lower.
European gains add momentum
The rally gathered further momentum in the second half of the session as European markets opened higher, triggering fresh buying interest and helping benchmarks finish near the day's high.
Vishnu Menon, SEBI-registered research analyst and founder of Trader Prepares, said the Nifty witnessed broad-based buying from the opening bell, supported by positive global cues and falling crude oil prices.
"The rally gathered further momentum after 1:30 PM IST as European markets opened with gains. The supportive opening in Europe triggered additional buying interest, helping the Nifty extend its gains and finish near the day's high and close above 23,600," he said.
Menon said that despite the strong rally, investors remain cautious heading into the weekend amid lingering geopolitical uncertainties and the possibility of fresh developments over the next two days.
Looking ahead, he said market participants will closely monitor crude oil prices, geopolitical developments, foreign institutional investor flows, domestic macroeconomic data, mutual fund inflows and corporate announcements, with global developments and liquidity trends expected to remain the primary drivers of market direction next week.