A fragile hope of peace in West Asia was enough to change the mood on Dalal Street on Wednesday, as a single report of a potential US-Iran breakthrough cooled crude prices, nudging investors back into risk assets.
Equities rallied, the rupee strengthened sharply, and the overall market tone turned more optimistic — though still hostage to headlines.
Benchmark indices reversed early losses to end over a per cent higher, with the Nifty 50 closing up 298 points at 24,331 and the Sensex rising 941 points to 77,958. Brent crude slipped nearly 7 per cent to around $102 a barrel, while WTI dropped over 8 per cent to below $94, marking its steepest two-session fall since the April ceasefire.
The trigger was a report from US-based Axios that said the US and Iran are close to a short memorandum aimed at ending hostilities, alongside a pause in escort operations in the Strait of Hormuz, easing fears of supply disruptions.
“The near-term market narrative has shifted meaningfully… if negotiations sustain momentum, the prolonged consolidation phase in the Nifty could begin transitioning into a more durable market re-rating,” said Siddhartha Khemka, Head of Research, at Motilal Oswal Financial Services
Yet, beneath the relief rally, unease lingers. “Who doesn’t like buoyant markets? So the going was good today… let’s keep our fingers crossed that things remain better tomorrow,” said Arun Kejriwal, founder of Kejriwal Research and Investment Services. He cautioned that oil dynamics remain unpredictable, with producing nations having little incentive to allow prices to fall meaningfully. “It is one day away from going back,” he said.
India VIX, the fear gauge, eased to around 16.7, signalling a moderation in near-term volatility.
Vinod Nair, head of research at Geojit Investments said markets were “driven by easing US-Iran tensions… though the trend remains headline-sensitive”, adding that part of the rally was tactical and short-covering led.
The rupee mirrored the shift in sentiment, logging its best single-day gain in nearly a month. It appreciated 67 paise to close at 94.61 per US dollar, moving below the 95 mark on softer crude and improved flows.
“The move was supported by easing geopolitical tensions… reducing oil supply risks,” said Dipti Chitale of Mecklai Financial Services, citing softer crude, foreign inflows and likely RBI dollar sales.
Precious metals also rallied sharply on the geopolitical developments, with gold prices jumping by ₹3,224 to ₹1,50,860 per 10 g, and silver prices rising by ₹8,602 to ₹2,49,067 a kg on hopes of a likely end to the hostilities in West Asia.
Published on May 6, 2026