India’s equity market kicked off the day on a high note, with benchmark indices BSE Sensex and NSE Nifty50 jumping almost 4% in early trade deals. The Sensex surged 2,800 points to an intraday high of 77,456, while the Nifty50 jumped over 800 points to 23,961.
The relief rally followed the announcement of a two-week ceasefire between the US and Iran, with Iran agreeing to reopen the Strait of Hormuz. This led to a sharp decline in Brent crude prices, down over 14% to around $95 per barrel, providing a major boost to equities.
“The two-week ceasefire has dramatically altered the near-term market scenario,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments. “The crash in Brent crude to $95 will turn the market bullish again”.
The RBI’s decision to maintain the repo rate at 5.25% also received a positive response from the market. “The decision was largely in line with expectations,” said Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Group. The volatility index India VIX fell by over 19%, reflecting easing market tensions. Midcap and smallcap indices also surged around 4% in early trade.
