Sensex, Nifty close sharply higher: 5 reasons behind today's stock market surge

The equity benchmark indices BSE Sensex and NSE Nifty on Monday (June 15) extended gains for a second consecutive session on Monday, with the Sensex soaring 736 points and the Nifty reclaiming the 23,850 mark, as confirmation of a US-Iran deal to end the war and a sharp fall in crude oil prices boosted investor sentiment.

The Sensex climbed 736 points to close at 76,264, while the Nifty advanced 231 points to 23,854. Both indices, however, ended below their intraday highs.

Here are the five key factors that drove the rally:

1. US-Iran deal boosts sentiment

Markets gained after the United States and Iran confirmed a deal to end the war, easing concerns over geopolitical tensions and supporting risk appetite across global markets.

2. Sharp fall in crude oil prices

Brent crude fell more than 5%, providing relief to oil-importing economies. The decline triggered gains in downstream oil companies, though upstream oil producers came under pressure.

3. Heavyweights led the advance

Reliance Industries Mahindra & Mahindra, Maruti Suzuki, and Maruti Suzuki were among the largest contributors to benchmark gains, helping the Nifty reclaim the 23,850 mark. Fourteen Nifty stocks rose more than 2%.

4. Broader markets outperformed

The rally was not limited to frontline stocks. The Midcap Index surged 782 points to 61,550, while market breadth remained strong with advancing shares outnumbering declining stocks by four to one on the NSE.

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5. Sectoral buying remained strong

Realty and Auto emerged as the top-performing sectors, while the IT index snapped an eight-session losing streak. Coforge rose nearly 3%, aiding the recovery in technology stocks.

Among individual stocks, Phoenix Mills jumped 6% after Macquarie initiated coverage with an "Outperform" rating, while GMR Airports gained 3% following a similar brokerage call. SEPC rose more than 7% after securing a ₹673 crore project from SAIL, and RBL Bank advanced 2% after appointing Bhavin Lakhpatwala as Chief Financial Officer.

From the Sensex basket, Trent Ltd, Shriram Finance Ltd, Eicher Motors Ltd, Bajaj Finserv Ltd, InterGlobe Aviation Ltd and UltraTech Cement Ltd were the major gainers. Bajaj Auto Ltd, Oil and Natural Gas Corporation Ltd, ICICI Bank Ltd, Hindalco Industries Ltd, Hindustan Unilever Ltd and Apollo Hospitals Enterprise Ltd were the biggest laggards.

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Dipan Mehta, Director, Elixir Equities, on markets, said, "I think every time we see a cessation of fighting in the Gulf or any geopolitical event gets resolved, India does well. I think India does really well in peacetime, and we have certain weaknesses, which, of course, the government is addressing. But this is certainly great news, and I'm not so much perturbed about FII selling.

I think when they come to buy, they will buy. More importantly, if we have a deal between Iran and the US, then the fundamentals of the Indian economy and corporate earnings, which have been deteriorating for the last three months or so, may start to see a reversal because of inflation, supply-chain disruptions, overall domestic demand being subdued, and overall sentiment being down, all of that can get reversed if the problem in the Gulf is over and oil eventually starts to flow easily.

Inflation will come down, and the kind of pressure that is on liquidity will ease. So, I think it's more to do with the stoppage of the deterioration of the fundamentals. That's more important from our perspective."

The Indian rupee also strengthened to a one-month high against the US dollar.