After a sharp sell-off in early trade, Indian equity markets bounced back strongly on Monday, as easing crude oil prices, stable global cues, and lower volatility helped soothe investor nerves.
The Sensex, which had plunged by over 900 points during the day, trimmed losses significantly to trade around 81,931 by 3 PM—down just about 430 points. The Nifty, too, clawed back above the 24,950 mark after dipping to an intraday low of 24,824.85.
What Turned the Tide?
Here are five key reasons behind Monday’s recovery rally:
1. Crude Oil Prices Retreat
Oil prices cooled off after an initial spike, offering relief from fears of imported inflation. Brent crude, which had surged to $77.66 per barrel amid rising geopolitical tensions, later eased to $75.69. The retreat in crude helped calm inflationary worries and supported equity sentiment.
2. Market Volatility Tapers Off
The India VIX, a measure of market volatility, fell to 14.06—still up 2.83% for the day but signaling a moderation in investor anxiety. A lower VIX is typically viewed as a sign of stability and confidence returning to the markets.
3. Global Markets Hold Steady
Global sentiment improved as Wall Street futures reversed losses later in the day. Earlier, US markets had dipped following reports of US airstrikes on Iranian nuclear facilities, but the impact was limited. Asian markets also traded in positive territory, with Hong Kong’s Hang Seng and China’s Shanghai Composite both gaining around 1%.
4. Geopolitical Risk Seen as Contained
Despite the heightened tensions following the US strikes on Iranian sites, market experts believe the situation is unlikely to spiral further.
“Even though the US bombing of Iran’s nuclear facilities has worsened the crisis in West Asia, the fallout for markets appears limited,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“The market believes Iran’s response will remain measured, given its economic ties with China and limited options against the US and Israel.”
5. Strait of Hormuz Stays Open
The Strait of Hormuz, a critical chokepoint for global oil shipments, remains open despite Iranian lawmakers voting in favor of a potential closure. This eased concerns over any immediate disruption in oil supplies.
“The threat of the Hormuz Strait closing has always existed but never materialized,” Vijayakumar added. “Its closure would hurt Iran—and its ally China—more than others. This underpins the market’s continued ‘buy on dips’ strategy.”
Key Gainers
Among the day’s top performers were Trent, Bharat Electronics, Hindalco Industries, Bajaj Finance, and Adani Enterprises, with gains of up to 4%.
Final Take
While the day started on a jittery note, markets showed resilience, rebounding sharply as fears around oil and geopolitics eased. With volatility cooling and global cues turning supportive, investors appear willing to stay the course—especially on dips.
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