The rally was broad-based, lifting both frontline and broader market indices. The Sensex climbed more than 1,300 points to touch an intraday high of 75,139, while the Nifty 50 reclaimed the 23,500 mark. The surge in equities added over ₹7 lakh crore to investor wealth, taking the combined market capitalisation of BSE-listed firms close to ₹460 lakh crore.
Market sentiment improved after reports suggested progress towards a possible agreement between the US and Iran, fuelling hopes of a de-escalation in regional tensions. Investors also cheered the prospect of reduced risks to global energy supplies, which triggered a decline in crude oil prices.
According to reports citing Iran’s Mehr News Agency, a proposed memorandum of understanding between the US and Iran could pave the way for the reopening of the Strait of Hormuz within 30 days and the lifting of sanctions on Iran’s oil exports. The reports also suggested that the US could withdraw forces from areas surrounding Iran, while both sides may begin a 60-day dialogue on nuclear-related issues.
Adding to the optimism, US President Donald Trump indicated that a breakthrough had been reached with Iran. Speaking at separate events on Thursday, Trump said Iran had agreed not to pursue nuclear weapons, describing it as a key objective of US efforts in the region.
Crude oil decline boosts sentiment
A sharp decline in crude oil prices further strengthened risk appetite. Brent crude slipped below $87.50 per barrel, touching its lowest level since mid-April.
For India, lower crude prices are generally viewed as a macroeconomic positive because the country relies heavily on imported energy. Softer oil prices help reduce import costs, ease pressure on the current account deficit and the rupee, and lower input expenses for sectors such as aviation, transportation, paints, tyres and manufacturing. They also help moderate inflationary pressures.
The benefits of lower crude prices were reflected in sectoral performance. Shares of oil marketing companies such as BPCL, HPCL and Indian Oil advanced between 2.4% and 3.8%, while airline operator IndiGo gained around 3.5%. Paint, tyre and cement stocks also attracted buying interest.
Broad-based participation
The rally extended beyond large-cap stocks. The Nifty Midcap 100 and Nifty Smallcap 100 indices both rose nearly 2%, indicating strong participation across market segments.
Among sectoral indices, Nifty Auto and Nifty Realty were among the top performers, gaining around 2% each.
Within the Sensex pack, all 30 constituents traded in positive territory. Tata Steel, IndiGo, L&T, Eternal, SBI and Tech Mahindra were among the leading gainers, rising as much as 3%.
Rupee rebounds
The Indian rupee also staged a strong recovery, supported by the decline in crude prices, a softer US dollar and improved sentiment in domestic equities.
The currency opened stronger in the interbank market and appreciated sharply against the greenback after ending the previous session under pressure. Traders said expectations of easing geopolitical risks and lower energy costs helped improve sentiment towards emerging market currencies, including the rupee.
Technical outlook
According to Sudeep Shah of SBI Securities, the zone between 23,310 and 23,330 remains a key support area for the Nifty, while resistance is placed in the 23,440-23,460 range.
A break below 23,310 could trigger further weakness towards the 23,220-23,240 zone. On the upside, a sustained move above 23,460 may extend the rally towards the 23,600 level.
