Indian shares surged to a two-week high on Monday as signs of progress in US-Iran peace talks pushed oil prices lower and boosted investor appetite for risk assets. According to reports from The Times of India, the Nifty rose 312 points (1.3%) to 24,032 and the Sensex added 1,074 points (1.4%) to close at 76,489, marking their highest close since May 8. This rally came after US President Donald Trump announced that Washington and Iran had "largely negotiated" a memorandum of understanding on a peace deal that would reopen the Strait of Hormuz, which carried a fifth of global oil and LNG shipments before the war. The comments pushed Brent crude futures down 5.5% to $97.8 per barrel - its lowest level in two weeks.
The geopolitical developments significantly impacted commodity markets, with Brent crude futures falling 5.5% to $97.8 per barrel - its lowest level in two weeks. As reported by The Times of India, fifteen of the sixteen major sectors rose during the session, with the small-cap and mid-cap indexes gaining 1.4% and 0.9% respectively. Heavyweight financials led the gains with a 2.2% jump, led by private sector lenders HDFC Bank and ICICI Bank, which rose 2.6% and 2.3% respectively. Gains, however, were capped as US and Iranian officials played down hopes for an imminent breakthrough, analysts said.
Oil marketing companies BPCL, HPCL, and Indian Oil, which together control 90% of India's fuel market, gained significantly after a sharp correction in crude oil prices. According to The Times of India, BPCL gained 4.3%, HPCL rose 3.5%, and Indian Oil increased 3.2% following the latest price increases. The companies benefited from petrol prices being raised by ₹2.6 per litre and diesel by ₹2.7, marking the fourth increase in less than two weeks. The cumulative hikes since May 15 have reached nearly ₹7.5 per litre.
Despite the market rally, gains were capped as US and Iranian officials played down hopes for an imminent breakthrough, as reported by The Times of India. The market performance comes amid continued foreign investor selling, with foreign portfolio investors offloading domestic stocks worth $23.9 billion so far this year, surpassing last year's record annual outflows. This sustained foreign selling pressure has contributed to the overall market volatility and investor sentiment in recent months.
