Rs 5 lakh crore gains! Sensex soars 787 pts, Nifty reclaims 22,950; Iran-US ceasefire framework, 3 other factors behind the rally

Indian stock markets erased all morning losses and turned positive in the afternoon session on Monday. The sudden rebound followed media reports on Pakistan-brokered Iran-US ceasefire framework, and other factors boosted investor confidence.

Sensex closed 787 points higher at 74,107, whereas Nifty 50 rose 255 pts or 1.12% to end the session at 22,968. The sudden rally on Dalal Street added more than Rs 5 lakh crore to the total market capitalisation of all companies listed on BSE, pulling it up to more than Rs 428 lakh crore.

Zudio-parent Trent shares were the top gainers on Sensex, rallying nearly 8%. Titan, Axis Bank, L&T, HDFC Bank, Bajaj Finance, UltraTech Cement, Bajaj Finserv, and IndiGo shares followed rising 2-4%. Bucking the trend, Reliance Industries (RIL) shares crashed more than 3%.


Most of the sectoral indices on NSE moved into the green, with Nifty Consumer Durables rising nearly 3% to lead gains, while Nifty PSU Bank and Nifty Realty gained over 2% each. Nifty Oil & Gas, however, fell over 1%. 2,511 stocks advanced on the stock exchange, while 746 declined and 89 remained unchanged, while India Vix declined 0.20% to 25.47.

Why stock market rose today? Key factors the rally

1) Iran-US ceasefire framework

Iran and US have reportedly received a plan to end their conflict, which can take effect as soon as today and lead to the resumption of trade through the Strait of Hormuz, Reuters reported, citing people familiar with the matter. The framework comprising a two-tier approach with an immediate ceasefire followed by a comprehensive agreement has been put together by Pakistan and was shared with Iran and the US overnight, it added.

Pakistan's army chief, Field Marshal Asim Munir, has been in contact "all night long" with US Vice President JD Vance, special ⁠envoy Steve ‌Witkoff and Iranian Foreign Minister Abbas Araqchi, as all the elements in the framework need to be agreed today, the report added.

This came after markets sharply declined in the morning after Trump ramped up his threats on Iran, claiming that the US will massively escalate its strikes on Tuesday in case the country doesn’t open the Strait of Hormuz, the critical waterway for the passage of oil and other trade. In a strongly-worded post on Truth Social, the US President wrote, “Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran. There will be nothing like it!!! Open the F****n' Strait, you crazy bastards, or you'll be living in Hell - JUST WATCH! Praise be to Allah.”

Meanwhile, Iran’s Parliament Speaker Mohammad-Bagher Ghalibaf warned that Washington risks being dragged into a “living HELL” after Trump’s expletive-laden threat targeting Iran’s infrastructure.

2) Oil prices slip below $110/barrel

The report on the ceasefire framework led to some relief in the skyrocketing rally in oil prices. Brent crude futures declined around 1% to trade at $108 per barrel. WTI Crude futures, meanwhile, fell around 2% to $109 per barrel. This comes after oil prices surged above $110 per barrel in the morning following Trump’s threats of further escalation in the war.

Oil prices have seen a significant surge since the outbreak of the war at the end of February this year. Oil prices crossed the crucial $100 mark in March after the closure of the Strait of Hormuz, marking the first time since Russia's invasion of Ukraine in 2022, and have sustained over that level since then.

3) Rupee

Rupee closed nearly unchanged on Monday, ending the session at 93.06 against the dollar, after closing at 93.10 in the previous session. This came after the Indian currency climbed around 2% on Thursday, bouncing back from a record low of 95.21.

RBI on last week stepped up its efforts to support the currency by barring banks from offering rupee non-deliverable forwards to resident and non-resident clients and preventing companies from ‌ rebooking cancelled forward contracts. “Uncertainty remains elevated, keeping volatility high in currency markets. The recovery appears more of a technical pullback after sharp depreciation rather than a trend reversal. Near-term support for rupee is seen near 92.50 and resistance 93.50,” said Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities.

4) Global markets

Global markets mostly were in the green, with Japan’s Nikkei rising above 0.8% and South Korea’s Kospi gaining more than 1%. UK’s FTSE gained around 0.7% while Germany’s DAX slipped into the red.

Wall Street and other markets remained closed on Friday on account of Good Friday. On Thursday, the Dow Jones Industrial Average fell 0.13%, the S&P 500 gained 0.11%, and the Nasdaq Composite rose 0.18%. Dow Jones futures are currently in the green.

Bears hiding behind the bulls?

Despite the sudden optimism in the markets, some caution is warranted. The reported ceasefire framework is yet to be announced by any of the world leaders, and the effectiveness of the same lies on its conclusion by today, as per the alleged conditions.

Additionally, the massive selling streak of foreign investors continues to weigh on investor sentiment. FIIs remained net sellers of Indian equities for the 23rd consecutive session, selling shares worth nearly Rs 9,931 crore on Thursday, according to data on NSE. While this does not reflect today’s activity, sustained outflows in recent sessions have weighed on investor sentiment. US bond yields also remain elevated.

What lies ahead?

Domestic equities staged a strong rally as value buying gained traction across the board, with oversold sectors such as finance, realty, and midcaps showing notable strength, said Vinod Nair, Head of Research at Geojit Investments. “Crude prices softened marginally on reports of ceasefire efforts, while encouraging provisional banking data supported interest in rate‑sensitive segments. However, overall risk appetite remains cautious due to persistent inflationary pressures and concerns over potential disruptions to global trade,” he said.

With the RBI policy, US CPI, crude trajectory, and geopolitical developments all converging this week, markets are likely to remain headline-driven, the analyst added. “Given the deep discount in the broader market, there is meaningful upside potential if a credible ceasefire emerges, despite the prevailing sell‑on‑rise trend,” he concluded.

Technical view

Anand James, Chief Market Strategist at Geojit Investments, said that Nifty during its two-day gaining streak was heading towards 24,400, but until that hurdle is cleared, more dips should be expected. “Be warned that prospects of 21900-21600 will rise if 22525 gives way, but such a collapse is less expected today,” he further said.

(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)