Sensex surges 950 points, Nifty nears 24,000 as US-Iran peace hopes pull crude below $100

Mumbai | 25 May 2026 

Indian stock markets rose sharply on Monday as a steep fall in crude oil prices and improving diplomatic signals between the United States and Iran lifted sentiment across sectors. The Sensex gained 947.95 points, or 1.26 percent, to trade at 76,363.30, while the Nifty 50 advanced 266.15 points, or 1.12 percent, to 23,985.45 as of 11:50 am IST. 

What drove the rally on Monday? 

The primary trigger was a sharp decline in crude oil prices. Brent crude fell 5.58 percent to USD 97.76 per barrel, slipping below the USD 100 mark for the first time in more than two weeks, on prospects of a diplomatic resolution to the West Asia conflict. 

US President Donald Trump said over the weekend that Washington and Tehran had “largely negotiated” a memorandum of understanding on a peace deal that would reopen the Strait of Hormuz, a critical shipping lane that carries approximately one-fifth of global oil and liquefied natural gas supplies. The strait has remained effectively shut since the conflict began on 28 February 2026. Trump added that negotiators had been told “not to rush into a deal” and that “both sides must take their time and get it right.” 

Israeli PM Benjamin Netanyahu also confirmed engagement, stating on X that he had spoken with Trump about the memorandum of understanding to reopen the Strait of Hormuz and the upcoming negotiations toward a final agreement on Iran’s nuclear programme. 

Which sectors and stocks gained the most? 

Oil marketing companies led sectoral gains. Shares of BPCL, HPCL and Indian Oil rose between 4 percent and 4.5 percent, benefiting from the crude pullback. The state-owned fuel retailers also raised petrol and diesel prices for the fourth time this month to partially offset prior losses. 

Banking shares added to the momentum, with HDFC Bank rising 2 percent and ICICI Bank climbing 1.3 percent. Bank shares broadly rose up to 4 percent, as investors bet that easing crude prices could help contain inflation and support interest rate stability. The broader Nifty Smallcap 100 gained 1.32 percent and the Nifty Midcap 100 rose 0.9 percent. 

India VIX, the market’s volatility gauge, declined up to 2.5 percent to 17.38, reflecting improved risk appetite among domestic investors. 

What else supported market sentiment? 

The rupee appreciated 40 paise to 95.20 against the US dollar, supported by optimism around the peace talks. The currency opened at 95.36 at the interbank foreign exchange market before touching the session high of 95.20 in early trade. 

Global cues were broadly supportive. Japan’s Nikkei 225 and Shanghai’s SSE Composite traded higher, while US futures for the Nasdaq, S&P 500 and Dow Jones rose up to 1.5 percent around 10:30 IST, pointing to a firm opening on Wall Street. 

US Secretary of State Marco Rubio separately said the United States and India were close to finalising an interim trade agreement, with the US Trade Representative expected to visit India soon, adding another positive note to investor sentiment. 

Outlook 

Markets will continue to track developments in US-Iran negotiations and crude oil price movement. Investor attention will also focus on whether diplomatic signals translate into a formal agreement to reopen the Strait of Hormuz, which would have direct implications for India’s import bill, inflation trajectory and corporate earnings. 

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