Indian equities gained on Monday, along with their global peers, after the US and Iran said they had agreed on a framework to end the war. US President Donald Trump’s statement that the Strait of Hormuz will reopen on Friday cheered investors.

The benchmark Sensex, after gaining as much as 1,293 points, or 1.7 per cent, gave up part of its gains and ended Monday’s session at 76,264, up 736 points, or 0.97 per cent. The Nifty ended the session at 23,854, up 231 points, or 0.98 per cent. The total market capitalisation of BSE-listed firms rose by ₹8.5 trillion to ₹470 trillion. Over the past two sessions, total market capitalisation has increased by ₹18 trillion on optimism that the warring sides would reach a truce.

News reports suggested that the US and Iran had agreed on a framework to end the war and, as part of the agreement, the US would stop its blockade of Iran and the Strait of Hormuz, the key chokepoint for oil flows, would be reopened. A memorandum of understanding is expected to be signed by both sides on Friday in Switzerland. More contentious issues, including the future of Iran’s nuclear programme, will be negotiated over a 60-day period.

The war, which began at the end of February, led to the deaths of thousands and triggered one of the biggest global energy crises. Iran struck Israel and countries in West Asia, hitting US bases, damaging energy infrastructure and blocking the Strait of Hormuz, through which about a fifth of global oil passes. US forces, in turn, blocked Iranian ports.

The news of the reopening of the Strait of Hormuz sent oil prices tumbling. Brent crude was trading at $85.52 a barrel, the lowest level since March 4, 2026, down 4.43 per cent. Despite the recent decline, Brent crude remains 11.7 per cent above pre-conflict levels.

Lower crude prices are positive for India, which relies heavily on imports to meet its energy needs. India’s wholesale price inflation rose 9.7 per cent year-on-year in May because of the after-effects of higher crude prices.

“The interim US-Iran peace agreement has significantly improved investor sentiment, triggering a broad-based recovery across equity markets. With crude oil prices easing, concerns around inflation have moderated, supporting a more stable interest rate outlook and improving earnings visibility for FY27. As the risk-reward equation for equities becomes more favourable, investors have increasingly shifted towards growth-oriented sectors such as automobiles, industrials, capital goods and real estate, which are well positioned to benefit from an improving macro environment. The easing in geopolitical risks is also expected to moderate bond yields, reduce FII outflows and strengthen the rupee, further reinforcing the positive market outlook,” said Vinod Nair, head of research at Geojit Investments.

Market breadth remained strong, with 3,030 stocks advancing and 1,384 declining. Larsen & Toubro, which has significant business exposure to West Asia, rose 3 per cent and was the biggest contributor to the Sensex’s gains. Since the beginning of the conflict, the Sensex has declined 6.2 per cent and the Nifty 5.3 per cent.

“Going forward, the zone of 23,970-24,000 is likely to act as an immediate hurdle for the index. A sustained move above the 24,000 mark could trigger fresh buying interest, paving the way for an upside rally towards 24,150, followed by 24,300 in the short term. On the downside, the zone of 23,730-23,700 remains a crucial support area, and holding above this range will be important for maintaining the prevailing positive bias,” said Sudeep Shah, head of technical and derivatives research at SBI Securities.

Foreign portfolio investors turned buyers after 13 sessions, purchasing shares worth a net ₹200 crore, while domestic institutional investors were net buyers to the tune of ₹3,189 crore.