The U.S. and Iran announced a deal to end a four-month-long conflict in West Asia [7].

The agreement has lifted global risk sentiment. This shift prompted investors to buy Indian equities, driving a rally on Dalal Street as the prospect of regional stability improves.

Market data from Monday shows varying degrees of growth. Some reports indicate the Sensex rose by 1,200 points [3], while other data shows the index rose 736 points to reach 76,264 [1]. Similarly, the Nifty index was reported to have reached the 24,000 level [4], though other figures place the rise at 231 points to a level of 23,854 [2].

Overall, the Sensex and Nifty rose nearly two percent [5]. This surge added approximately Rs 10 lakh crore to the wealth of investors [6].

A key component of the peace deal includes the reopening of the Hormuz Strait [8]. The strait is a critical maritime artery for global energy shipments, and its reopening is expected to reduce volatility in oil markets.

Analysts said the market reaction was swift. While some reports highlight a sharp rebound on Friday [contradiction], other data shows the markets opened with strong gains on Monday morning [contradiction]. The influx of capital into Indian benchmarks reflects a broader trend of investors moving back into emerging markets as geopolitical tensions ease.

“The US and Iran announced an end to a four-month-long conflict in West Asia.”

The market reaction demonstrates the high sensitivity of Indian equities to geopolitical stability in West Asia. Because India is a major importer of energy, the reopening of the Hormuz Strait reduces the risk of supply chain disruptions and oil price spikes, which historically weigh on the Indian economy. The immediate capital infusion into the Sensex and Nifty suggests that investors had priced in a prolonged conflict, and the peace deal acted as a catalyst for a rapid correction in asset valuations.