Indian stock markets sprinted for a second consecutive day on Monday, driven by a sharp drop in crude oil prices and a peace deal between the United States and Iran that boosted investor sentiment. The benchmark indices opened higher and maintained gains throughout the session, reflecting optimism across global markets.
Oil Prices Hit Three-Month Lows
Crude oil prices fell to three-month lows in global markets after the announcement of the US-Iran peace deal. Global benchmark Brent Crude dropped 5 per cent to trade near USD 82.90 per barrel, marking a significant decline from recent highs. The drop in oil prices is seen as a positive development for oil-importing countries like India, as it reduces inflationary pressures and improves the fiscal outlook.
Market Reaction
The rally in stock markets was broad-based, with buying seen across sectors such as banking, auto, and consumer goods. Analysts attributed the upbeat mood to the easing of geopolitical tensions and the potential for lower input costs for companies. The BSE Sensex rose over 500 points, while the Nifty 50 crossed the 18,500 mark during the day.
Investors also took comfort from the US-Iran peace deal, which is expected to stabilize energy markets and reduce uncertainty in the Middle East. The agreement, announced over the weekend, has been welcomed by global leaders and market participants alike.
Global Context
The positive sentiment was not limited to Indian markets. Asian and European stock indices also traded higher, with oil-importing nations particularly benefiting from the decline in crude prices. The US dollar weakened slightly against major currencies, while bond yields remained stable.
Market experts believe that the rally may continue in the near term if oil prices remain subdued and geopolitical risks recede. However, they caution that investors should remain vigilant about any signs of volatility in global markets.
