Sensex closes 1,700 points higher: What drove today's rally?
What's the story
The Indian stock market witnessed a massive surge on Friday, with the Sensex and Nifty gaining 2% each. The rally was driven by hopes of a US-Iran peace deal, falling crude oil prices, and improved global sentiment. The Sensex jumped over 1,695 points to close at 75,527.95 while the Nifty 50 gained over 461 points to settle at 23,622.90.
Market value
Bajaj Finance leads Sensex gainers
The market rally added nearly ₹10 lakh crore to the total market capitalization of BSE-listed companies, taking it to around ₹462 lakh crore. Bajaj Finance shares led the gains on Sensex with a 6% jump. L&T and IndiGo shares also surged by around 5% each while Titan, Eternal, HDFC Bank, Bajaj Finserv, Axis Bank, Reliance Industries, UltraTech Cement, Bharti Airtel, Kotak Mahindra Bank, and Maruti Suzuki shares gained between 2-4% each.
Sectoral gains
Broader market also witnesses rally
The market rally was broad-based with the Nifty Midcap 100 and Nifty Smallcap 100 indices gaining over 2% each. All sectoral indices posted strong gains except for Nifty IT which closed marginally lower. The India VIX, a measure of market volatility, fell by 5% to indicate easing volatility in the market.
Geopolitical impact
US-Iran peace deal hopes boost market sentiment
The hopes of a US-Iran peace deal boosted market sentiment. US President Donald Trump said that the US and Iran could sign a peace deal as soon as this weekend, reopening the Strait of Hormuz for shipping. The potential agreement includes a commitment from the US to lift oil sanctions and from Iran to reopen the Strait within 30 days.
Market response
Oil prices fall amid peace deal talks
Oil prices fell below $90 per barrel amid rising hopes for a quicker end to the Iran-US peace deal and reopening of the Strait of Hormuz. Brent crude futures fell 4% to trade below $87 per barrel while WTI Crude futures dropped over 4% to $83 per barrel. This comes after a major rally earlier this year had pushed oil prices above $120 per barrel, shaking global markets.