A sharp fall in crude oil prices following a pause in military strikes between the US and Iran lifted sentiment across Indian financial markets on Monday, helping equities snap a five-day losing streak, strengthening the rupee and pushing bond yields lower.
Strong buying in the final hour helped indices close near their day’s highs with the BSE Sensex rising 776 points to close at 76,836, while the Nifty up 228 points to end just short of the 24,000 mark. Despite the market rally, FIIs remained net sellers (₹1,688 crore), while DIIs stayed net buyers (₹2,329 crore), helping add about ₹5.1 lakh crore to investors’ wealth.
Investor confidence improved after Brent crude plunged 8.92 per cent to about $89 a barrel after Iran indicated it would halt attacks as long as the US refrained from military action. The decline in oil prices is a major positive for India, the world’s third-largest crude importer, as it eases inflationary pressures, improves the current account position and supports corporate profitability.
“The relief in crude oil prices has provided a near-term respite to equities, especially as markets were in an oversold zone,” said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities. He noted that domestic macroeconomic indicators remained strong and the earnings season had not thrown up any major negative surprises. However, he cautioned that the sustainability of the rally would depend on geopolitical developments and the smooth passage of crude shipments through the Strait of Hormuz.
The positive sentiment extended to the currency market, with the rupee recording its biggest single-day gain in seven weeks. The currency appreciated 68 paise to close at 95.88/$ (from Friday’s close of 96.56).
Supporting sentiment was RBI Governor Sanjay Malhotra’s interview in businessline. “Banks have mobilised nearly $32 billion, largely through FCNR(B) deposits, and inflows remain robust. The rupee is not overvalued and does not reflect economic fundamentals. We remain committed to currency and financial stability,” he said.
The bond market also rallied, with the benchmark 10-year government bond yield easing five basis points to 6.78 per cent from 6.83 per cent.
Published on July 27, 2026
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