Markets opened with strong gains on Monday as a surprise diplomatic breakthrough between India and Pakistan and progress in US-China trade talks boosted investor sentiment across global markets.
The Sensex jumped 1,945.05 points or 2.45 per cent to 81,399.52 after opening strong at 80,803.80, compared to the previous close of 79,454.47. The Nifty also soared 599.80 points or 2.50 per cent to 24,607.80, up from its previous close of 24,008.00 at 9.50 am.
The rapid market recovery follows Friday’s sell-off triggered by escalating India-Pakistan tensions. A scheduled meeting between the Director Generals of Military Operations (DGMOs) of both countries at 12 noon today has significantly eased concerns, with both nations agreeing to cease military operations across land, air, and sea borders.
“A thawing of the relationship between India and Pakistan is likely to trigger a massive rebound for benchmark Nifty early Monday trades,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd. “But that said any fresh violations of the ceasefire deal from Pakistan could keep bullish sentiments fragile.”
In another positive development, the US and China have agreed to resume trade negotiations, with China committing to increase purchases of American products. US index futures were up nearly 2 per cent in early trading.
Among top gainers on the NSE, Adani Enterprises led with a 6.22 per cent surge to ₹2,391.10, followed by Jio Financial Services at 4.83 per cent, Shriram Finance at 3.92 per cent, and Axis Bank at 3.80 per cent. Only two stocks in the Nifty 50 traded lower — Sun Pharmaceuticals dropped 5.00 per cent after President Trump announced plans to benchmark Medicare drug payments against lowest international prices, and Cipla declined marginally by 0.80 per cent.
“In Friday’s trading session, the Nifty and banking index came under pressure due to rising tensions between India and Pakistan, triggering sharp selling across sectors,” noted HBL VLA Ambala, SEBI Registered Research Analyst. “However, should view this market weakness as a temporary phase. In contrast, India’s growth outlook remains strong in the long run.”
Sector-wise, defence stocks gained momentum due to recent geopolitical tensions, with positive outlook for BDL, HAL, Bharat Forge, and Data Patterns. The IT sector rallied on hopes of US-China trade deal progress, while gems and jewellery stocks showed strength following robust quarterly results from Titan and Kalyan Jewellers.
In commodities, gold prices fell to $3,340 per ounce as investors focused on upcoming trade talks. “Gold prices fell sharply in morning trades across Asian markets amid signs of progress in trade talks between US and China, along with some relief in geopolitical tensions,” said Rahul Kalantri, VP Commodities at Mehta Equities.
Brent crude prices surged 2 per cent to above $63 per barrel, driven by increased optimism following the announcement of a US-UK trade deal.
Adding to positive sentiment, the Indian Meteorological Department (IMD) forecasted an early monsoon arrival in Kerala by May 27, ahead of the usual June 1 onset. Additionally, credit rating agency Morningstar DBRS upgraded India’s sovereign credit rating to BBB with a stable trend from BBB (low).
“Morningstar DBRS’s upgrade of India’s sovereign rating to BBB (stable) from BBB (low) will also buoy bulls,” said Devarsh Vakil, Head of Prime Research at HDFC Securities. “The Nifty index is expected to commence trading with substantial upward momentum, above the formidable resistance zone of 24450-24500.”
Technical analysts remain cautiously optimistic. “If the Nifty sustains above the 24,250 level, fresh long positions can be considered gradually,” advised Hardik Matalia, Derivative Analyst at Choice Broking.
Vikas Jain, Head of Research at Reliance Securities, noted: “NIFTY-50 tests and holds the 20-day average of 23,900 levels and after a retracement of 400 points from a recent high we expect some bounce back to move towards 24,400 levels over the next few days.”
According to AMFI data, monthly inflows through Systematic Investment Plans (SIPs) rose 2.72 per cent to a record high of ₹26,632 crore in April, reflecting continued retail investor confidence in Indian markets despite recent volatility.
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Published on May 12, 2025
