Markets soar on geopolitical breakthroughs, post highest single-day gains in 4 years 

The markets witnessed an unprecedented rally on Monday, with benchmark indices recording their biggest single-day gains in nearly four years, driven by a series of positive geopolitical developments and global trade optimism. The Sensex surged 2,975.43 points (3.74 per cent) to close at 82,429.90, while the Nifty 50 jumped 916.70 points (3.82 per cent) to end at 24,924.70.

The market’s explosive rally was primarily triggered by a ceasefire agreement between India and Pakistan, coupled with renewed optimism surrounding the US-China trade negotiations. The breakthrough came after intensive diplomatic efforts, with both nations agreeing to a temporary rollback of trade tariffs for a 90-day period. “The ceasefire announcement has eased geopolitical concerns, allowing markets to reorient toward stability and policy continuity,” said Arun Patel, Founder and Partner at Arunasset Investment Services.

Top gainers led the charge, with Adani Enterprises rising 7.73 per cent, Infosys climbing 7.69 per cent, Shriram Finance up 7.16 per cent, Trent gaining 6.79 per cent, and Wipro increasing by 5.99 per cent. The rally was broad-based, with nearly 90 per cent of Nifty 500 stocks trading in positive territory. Sectoral indices showed remarkable strength, with the Nifty Realty index jumping 5.93 per cent and the IT index surging 6.48 per cent.

Vaibhav Vidwani, Research Analyst at Bonanza, noted, “The sharp rally was primarily driven by the announcement of a ceasefire agreement between India and Pakistan over the weekend, which significantly eased geopolitical tensions.” The market sentiment was further bolstered by additional positive developments, including an early forecast for the South-West monsoon and upcoming Russia-Ukraine peace talks.

The market’s technical outlook remains robust. Rupak De, Senior Technical Analyst at LKP Securities, observed, “The Nifty witnessed its best day in four years… Technically, the index has broken out of recent consolidation across multiple timeframes, confirming a positive trend.” Analysts suggest the index could potentially target 25,200-25,300 levels in the short term.

Commodities markets also saw significant movement, with gold experiencing a sharp decline. Jateen Trivedi from LKP Securities reported gold prices plunging approximately ₹4,000 to ₹92,500 on the MCX, driven by easing global tensions and a strengthening dollar index.

The broader market showed exceptional strength, with the Nifty Midcap 100 and Nifty Smallcap 100 indices surging over 4 per cent each. Trading volumes on the NSE cash market increased by 13 per cent, while the India VIX volatility index dropped 15 per cent, indicating reduced market uncertainty.

Only two stocks among the major indices showed losses: Sun Pharma declined 3.15 per cent and IndusInd Bank dropped 3.45 per cent, primarily impacted by global pharmaceutical pricing discussions and sector-specific challenges.

Looking ahead, market experts remain cautiously optimistic. Devarsh Vakil from HDFC Securities highlighted key support levels, noting that the Nifty has support at 24,590 and potential resistance at 25,207. The coming sessions will likely be influenced by ongoing geopolitical developments, global trade negotiations, and upcoming economic indicators.

As the market closed, investors and analysts alike are watching closely to see if the current momentum can be sustained in the coming trading sessions, with particular attention to the potential impact of the India-Pakistan ceasefire and ongoing global trade negotiations.

Published on May 12, 2025