Indian equities extended their sharp rally for a second consecutive session on June 15, with benchmark indices climbing nearly one percent amid easing geopolitical tensions in West Asia and a steep fall in crude oil prices. Investor sentiment improved significantly after reports of a peace agreement between the US and Iran, triggering a global risk-on rally and boosting hopes of lower inflationary pressures for oil-importing economies such as India.
The Sensex closed 736 points, or 0.97 percent, higher at 76,264, while the NSE Nifty 50 gained 231 points, or 0.98 percent, to end at 23,854. During the day, the Sensex touched an intraday high of 76,821, while the Nifty briefly crossed the 24,000 mark.
The latest rally has added more than 2,430 points to the Sensex in just two trading sessions, reflecting a sharp improvement in investor confidence.
Key benchmarks closed near the day's highs despite some profit-booking in late trade.
The primary trigger for the rally was the announcement of an initial agreement between the US and Iran to end hostilities and restore commercial shipping through the Strait of Hormuz.
The development eased concerns about disruptions to global energy supplies and reduced fears of a prolonged geopolitical conflict.
Brent crude prices witnessed a sharp decline after the peace announcement, providing immediate relief to global markets.
Lower energy costs are particularly positive for sectors such as:
Aviation
Paints
Chemicals
Logistics
Oil marketing companies
Market experts believe the reduction in geopolitical uncertainty could encourage greater risk-taking by investors globally.
According to analysts, attention will now shift to:
Progress of the southwest monsoon
Any potential impact from El Niño conditions
Corporate earnings for the June quarter
Global interest rate trends
While the immediate trigger has been the easing of tensions in West Asia, the sustainability of the rally will depend on domestic earnings growth and macroeconomic indicators.
A favourable monsoon, stable crude prices and strong quarterly results could provide further support to equities in the coming weeks.
The strong rally reinforces investor optimism that a decline in geopolitical risks and energy prices could create a more supportive environment for India's economy and equity markets in the second half of the year.