Benchmark indices rallied on Monday, supported by a combination of easing geopolitical tensions, a sharp decline in crude oil prices, a stronger rupee, strong Q1FY27 results, and renewed FII buying. According to The Hindu BusinessLine, the Sensex traded at 78,719.67, up 625.03 points or 0.80 per cent as of 1.30 PM, while the Nifty 50 reached 24,588.35, up 204.75 points or 0.84 per cent. The gains built on a strong gap-up open and were underpinned by US President Donald Trump's decision to allow direct diplomatic talks with Iran to resume, raising hopes of a resolution over the blockaded Strait of Hormuz. The breadth of the rally was wide, with 2,943 stocks advancing and 1,031 declining out of 4,204 traded on BSE, while 149 stocks hit 52-week highs against 43 at 52-week lows.
Oil prices slipped over 5 per cent, dropping $4.44 to trade at $83.49 per barrel after US President Donald Trump said negotiations with Tehran will begin on Monday. As reported by The Hindu BusinessLine, WTI crude oil pulled back sharply to the $79–80 per barrel range, down nearly 6 per cent from recent highs, as the prospect of the Strait of Hormuz reopening eased supply concerns. The oil price decline provided significant relief to Indian markets, which had been impacted by previous geopolitical tensions in the West Asia region. According to Essential Business Intelligence, Brent crude fell $3.52 to $84.41 a barrel, while U.S. West Texas Intermediate declined $3.49 to $81.18 after Trump cancelled planned military strikes against Iran following requests from Tehran and other Middle Eastern countries to hold back while negotiations continued. Falling crude prices are supportive for India's trade balance and inflation outlook, according to Devarsh Vakil, head of prime research at HDFC Securities.
The domestic benchmark indices gained in early trade, tracking the Indian rupee's stronger opening against the US dollar. According to The Hindu BusinessLine, the rupee extended its gains on the back of lower energy prices and improved risk appetite, trading near ₹95.1 against the US dollar, after breaking below its long-term ascending trendline. The gains were followed by five straight sessions of gains for the domestic currency against the greenback. Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, noted that the currency was supported by the sharp decline in the US Dollar Index to around 100, lower Brent crude oil prices, sustained foreign portfolio inflows, and continued RBI presence in the foreign exchange market.
Another factor aiding the gains in benchmark indices is that India Inc.'s Q1FY27 earnings season remained resilient, with several sectors reporting healthy profit growth despite pressure from oil marketing companies (OMCs). As reported by Business Standard, according to Motilal Oswal Financial Services (MOFSL), the combined earnings of its 211-company coverage universe rose 2 per cent year-on-year (Y-o-Y) in the June quarter, outperforming its expectation of a 10 per cent Y-o-Y decline, largely due to a weaker-than-anticipated drag from OMCs. Excluding OMCs, earnings grew 17 per cent Y-o-Y, ahead of the brokerage's estimate of 13 per cent growth. The earnings expansion was led by the banking, financial services and insurance (BFSI) sector with 20 per cent Y-o-Y growth, followed by metals, technology and automobiles.
The emergence of IT heavyweights Infosys and TCS in the top gainers list by midday marked a shift from the morning session, where financial services dominated. According to The Hindu BusinessLine, Infosys added 3.27 per cent, trading at ₹1,167.10 against a previous close of ₹1,130.10, with volumes of over 57 lakh shares underlining strong institutional interest. TCS rose 3.06 per cent to ₹2,438.00 from ₹2,365.60, with value traded crossing ₹45,000 lakhs. The IT sector had been the top sectoral performer last week, surging 6.6 per cent, and Monday's price action suggested that momentum was being carried forward into a new week. IndiGo led the Nifty 50 gainers by afternoon trade, rising 4.03 per cent to ₹5,379.50 from a previous close of ₹5,171.00, benefiting directly from the sharp fall in aviation fuel costs as crude retreated.
