Markets Bounce Back as Sensex Jumps 500 pts, Nifty Hovers Around 24,900: Here's Why

The Indian stock market bounced back on Monday, marking a strong recovery across D-street as investor sentiment improved. Benchmark indices, Sensex and Nifty, clocked robust gains even as geopolitical tensions in the West Asian region remained elevated.

The BSE Sensex index was trading at the 81,657.28 level mark, up by more than 500 points or 0.66%. Whereas, the Nifty50 index hovered around the 24,900 level mark, indicating a surge of nearly 180 points or 0.72%.

Volatility also took a declining trajectory with D-street's volatility gauge, Nifty Vix plummeting over 2.5% on Monday.

Indian benchmarks followed the cues of Asian peers. Japan's Nikkei witnessed a robust surge of 477 points or 1.26%. Kospi and Hange Seng witnessed a similar uptrend and rose over 1.8% and 0.50%, respectively.

Meanwhile, India and the US are reportedly working on the final proposal for the trade agreement. According to a Times of India report, the proposed bilateral trade agreement (BTA) is likely to be finalised before the July 9 tariff deadline. This comes as a relief to investors who are estimating inflationary pressures to start kicking in if Trump's tariff regulation comes into effect.

"Risk assets are in the green this morning, not by much, but the fact that the weekend escalation hasn't seen another opening slump is an indication that investors expect the crisis to de-escalate," said Akshay Chinchalkar, head of research, Axis Securities.

From the Sensex30 pack, nearly all stocks were trading in green except Tata Motors, Adani Ports, Sun Pharma and SBI. Tech Mahindra, UltraTech Cement, L&T, HCL tech and TCS were among the top gainers.

All sectors were trading in green. Nifty IT came out on top and rose by over 600 points, 1.63%.

"The uncertainty stemming from the Israel-Iran conflict has created a risk-off in global markets. The safe-haven buying is keeping gold firm but dollar continues to be weak. Interestingly there is no panic in equity markets. Markets will be severely impacted only if Iran closes the Strait of Hormuz triggering a huge spike in crude. This appears to be a low probability event now," said VK Vijayakumar, chief investment strategist, Geojit Investments.