Indian equity benchmarks experienced a strong start on Monday, with the BSE Sensex opening at 76,270, gaining around 855 points from its previous close of 75,415.35, and surging as much as 850 points, or 1.11% in early trade. The NSE Nifty50 opened at 23,971, rising around 251 points, or 1.02% from its previous close of 23,719.30, climbing 242.15 points to 23,961.45. According to The Economic Times, the sharp gains added nearly ₹5 lakh crore to the total market capitalisation of all companies listed on BSE, pulling it up to around ₹468 lakh crore. The rally remained broad-based, with the Nifty MidCap 100 and Nifty SmallCap 100 indices gaining up to 1%, while sector-wise performance showed the Nifty Auto index emerging as the top gainer, rallying over 2% to lead sectoral advances.
Investor mood improved after US President Donald Trump said negotiations with Iran were progressing 'constructively', with reports suggesting that Iran and the United States are inching closer towards a peace deal as negotiators have agreed to the broad principles of the much-awaited agreement, as reported by CBS News citing a senior Trump administration official. As reported by The Economic Times, Trump stated in a post on Truth Social over the weekend that an agreement had been 'largely negotiated' between Washington and Tehran, while also indicating that the United States was engaged in discussions with several countries regarding peace and stability efforts in the Gulf region. Markets are closely watching developments around the Strait of Hormuz, a key global oil transit route, whose disruption has weighed heavily on sentiment in recent months. The latest developments sparked hopes for a sooner conclusion to the peace deal, with investors increasingly hopeful for the resumption of normal traffic through the Strait of Hormuz, a narrow 33-kilometre waterway connecting the Persian Gulf with the Gulf of Oman that handles over 20% of the world's daily oil and gas shipments.
Mahindra & Mahindra (M&M), Bajaj Finance, HDFC Bank, L&T, Bajaj Finserv, Eternal, Maruti Suzuki and UltraTech Cement shares gained around 2% each to lead gains on Sensex, while TCS, NTPC, Sun Pharma and Infosys shares were trading in the red with marginal losses. According to The Economic Times, around 2,116 stocks advanced on NSE, while 456 declined and 104 remained unchanged. The India VIX, which measures volatility in the market, tumbled over 4% to 17.15 in the morning, reflecting reduced market uncertainty. Buying interest was visible across financials, auto and metal stocks as softer crude oil prices improved risk appetite and supported sentiment in emerging markets. The Nifty PSU Bank, Nifty Bank and Financial Services indices also outperformed, while the Nifty IT index underperformed the broader market.
Global crude oil prices witnessed a sharp decline amid hopes of progress in talks between the United States and Iran. At the time of writing, Brent crude fell over 4.5% to around $98.81 per barrel, while US West Texas Intermediate (WTI) crude declined about 4.7% to $92.08 per barrel. Earlier, Brent crude had dropped as much as 5% during trade. The fall in oil prices came after reports suggesting that Iran had agreed in principle to reopen the Strait of Hormuz, easing some of the inflationary concerns that had troubled global markets. A sustained decline in crude prices would be particularly beneficial for India, given the country's dependence on oil imports.
Despite the renewed optimism, Foreign investors remained net sellers of Indian equities for the fourth consecutive session on Thursday, selling shares worth ₹4,440 crore on Dalal Street, according to provisional data on NSE. As reported by The Economic Times, Foreign investors have mostly remained bearish on Indian markets this month so far, remaining net sellers of Indian equities in 11 out of 15 sessions so far in May. FPI selling for May up to the 23rd stood at ₹30,374 crore, taking the total FPI selling in 2026, so far, to ₹2,22,343 crores, which is higher than the total sales figure of ₹1,66,283 crores for 2025. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that poor earnings growth in India, much better earnings growth and prospects in other markets, high bond yields, particularly in the US, and persistent rupee depreciation were cited as reasons for sustained FII outflows. However, he added that stabilisation of the rupee and improvement in the prospects of earnings growth can bring FIIs back to India.
