Indian shares rose sharply at the start of a critical week. The Sensex gained more than 860 points by midday and the Nifty passed 23,300, after reports that Washington would give Iran diplomacy more time pushed Brent below $110. Oil companies, among the stocks most affected by the crisis, led the gains.
The Sensex was up 863.39 points, or 1.16%, at 75,322.92 at noon, and the Nifty 50 was up 252.75 points, or 1.10%, at 23,305.85. In early trade the Sensex rose as much as 907 points to 75,366. The rally was broad: the Nifty Midcap rose 0.96% and the Smallcap 0.86%. The total market value of BSE-listed companies rose to about ₹479 lakh crore.
However, during mid-cay the Sensex gave up some gains and was trading 635 points higher on profit booking.
What changed
Oil drove the move. Brent fell more than 3% to below $110 a barrel, erasing all of Friday’s gains, and US crude dropped below $101.
The trigger was a Bloomberg report that President Trump wants to give diplomacy with Iran more time before deciding whether to resume strikes after Tuesday’s election. On Saturday, Secretary of State Marco Rubio said no decision on new strikes had been made and that the president prefers a diplomatic solution. Iranian and Qatari officials also held a third straight day of talks aimed at ending the war.
That eased the main fear of last week, that US strikes would resume immediately after the election.
Oil and gas stocks lead
The Nifty Oil & Gas index rose more than 4%, the best-performing sector. State oil companies such as IOC, BPCL and HPCL benefit most when crude falls, because they sell petrol, diesel and household LPG at fixed prices and lose money when crude is expensive. Every $5 fall in Brent improves their margins noticeably. Paint, tyre and aviation stocks, which also depend on crude, are likely to gain too.
The rally rests on reports and statements, not on a deal. The Strait of Hormuz remains effectively closed to commercial traffic. Iran’s Revolutionary Guard navy said two tankers exploded after hitting mines near the strait over the weekend.
Bloomberg reported that Iran’s Supreme Leader has told military commanders to prepare for renewed fighting, even as his foreign minister described progress in talks. Speaking at a rally on Sunday, Trump said the war would end very soon, but has not ruled out further military action.
The US midterm elections are on Tuesday. If the vote passes without a move towards strikes and the talks continue, today’s gains could extend into Diwali. If Washington changes course after the election, oil could reverse quickly.
Also today
EAAA India Alternatives made a flat market debut. October two-wheeler sales were strong, led by TVS. The manufacturing PMI eased slightly but export orders reached a six-month high. ITC reports results after market hours.
This story will be updated through the session.
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