Indian stock markets witnessed a sharp rally with Sensex surging 826.09 points and Nifty gaining 239.90 points, marking a 2.5% surge as investors celebrated the India-US trade deal announcement. According to latest reports from Moneycontrol, the markets opened on a significantly stronger note than the previous session's weaker outlook, with the GIFT Nifty trading marginally lower around 24,069.50 in early trade now replaced by robust positive momentum. The rally was driven by falling oil prices, which dropped over 5%, providing substantial relief to markets amid ongoing geopolitical tensions.
The current rally builds on Monday's strong performance when the Indian stock market witnessed a sharp rally amid buying across the board, with both benchmarks rising more than 1% each. As reported by Moneycontrol, the Sensex jumped 1,073.61 points, or 1.42%, to close at 76,488.96, while the Nifty 50 settled 312.40 points, or 1.32%, higher at 24,031.70. The positive momentum was driven by a sharp decline in crude oil prices amid optimism over a potential US-Iran deal, with positive global cues and appreciation in the Indian rupee further boosting investor sentiment.
Crude oil prices fell over 5% during the current session, providing significant relief to markets that had previously seen volatility amid geopolitical tensions. According to Moneycontrol, Asian markets traded mixed amid hopes for a breakthrough in the US-Iran peace talks, with crude oil advancing after reports of US strikes on sites in Iran damped optimism over a potential deal with Tehran. The dollar nursed losses on Tuesday as rising investor optimism of a deal being struck to reopen the crucial Strait of Hormuz and end the three-month-long Iran war supported market sentiment.
US stock futures were closed on Tuesday in observance of the Memorial Day holiday, with the US markets shut for the holiday. Crude oil prices rose on reports of fresh military strikes in Iran, but the current session's rally was primarily driven by the India-US trade deal announcement, which has added momentum to India's growth ambitions. Brent crude oil futures had previously slumped by more than 7% on Monday, as reports of fresh military strikes in Iran clouded the outlook for an interim deal between Tehran and Washington to reopen the Strait of Hormuz.
Foreign institutional investors (FIIs) turned net buyers on May 25, purchasing equities worth ₹821 crore after remaining net sellers for the previous four sessions. Meanwhile, domestic institutional investors (DIIs) extended their buying streak for the sixth consecutive session, with equity purchases amounting to ₹3,856 crore. As reported by Moneycontrol, this fund flow action provides support to the market despite the weaker opening outlook, with the combination of positive global cues, falling oil prices, and the India-US trade deal announcement helping to offset geopolitical uncertainties and provide sustained momentum for the current session's strong performance.
