Sensex rallies 400 points despite Iran War as bargain buying lifts indian markets
Indian stock markets opened the week with a strong rebound. The benchmark BSE Sensex jumped more than 400 points in early trade on Monday. At the same time, the NSE Nifty 50 also moved higher. The surge came even as tensions linked to the ongoing Iran–Israel conflict 2026 continued to create uncertainty across global markets.
However, investors chose to focus on short-term opportunities rather than geopolitical fears. Traders returned to the market after last week’s steep fall. As a result, heavy buying at lower levels helped push the indices upward.
Market Recovers After Last Week’s Sharp Fall
Last week brought a strong correction in Indian equities. The Nifty dropped about 5.3 percent during the week. Meanwhile, the Sensex lost nearly 5.5 percent. The decline marked the worst weekly fall for the Nifty since mid-2022 and the steepest drop for the Sensex since 2020.
Therefore, Monday’s rise reflects a classic technical rebound. Investors spotted cheaper valuations after the sharp correction. Consequently, many traders stepped in to accumulate stocks across banking, energy and infrastructure sectors.
Market participants often follow this strategy after sudden declines. When prices fall quickly, several fundamentally strong companies become attractive for fresh investment. This bargain buying created immediate support for the market.
Diplomatic Signals Offer Some Relief
At the same time, diplomatic developments also improved sentiment. India’s External Affairs Minister S. Jaishankar confirmed ongoing discussions with Iran over maritime routes.
The talks focus on ensuring safe shipping through the crucial Strait of Hormuz. This narrow waterway connects the Persian Gulf with the Arabian Sea and serves as one of the world’s most important energy corridors.
According to Jaishankar, direct communication with Iranian authorities has produced some positive signals. He also emphasised dialogue and coordination as the best approach to resolving the current tensions.
For investors, these diplomatic efforts reduced immediate fears about energy supply disruptions. As a result, traders showed more confidence in returning to equity markets.
Movement of LPG Ships Eases Supply Concerns
Another development added to market optimism. Two Indian-flagged LPG carriers recently crossed the Strait of Hormuz safely. The ships carried around 92,700 metric tonnes of liquefied petroleum gas and are heading toward India.
The vessels plan to dock at the ports of Mundra Port and Kandla Port. Their safe passage suggested that shipping through the route may continue despite the regional conflict.
However, officials clarified that India has not signed any formal arrangement with Iran regarding ship movement. Instead, ongoing diplomatic engagement has helped manage the immediate situation.
Why Markets Still Show Resilience
The global oil trade depends heavily on the Strait of Hormuz. Nearly 20 percent of the world’s crude oil supply passes through this narrow channel between Iran and Oman. Therefore, any closure could trigger a massive spike in energy prices.
Recently, signals from Iranian representatives suggested that Tehran does not plan to shut the strait completely. This indication eased some fears in international markets.
Consequently, investors assumed that energy flows may continue, even if tensions remain high. That expectation helped stabilise sentiment in stock markets worldwide.
Risks Still Remain
Despite Monday’s rally, risks continue to hover over global markets. Crude oil prices still trade above 100 dollars per barrel due to supply disruptions in West Asia.
For India, this remains a serious concern. The country imports most of its crude oil requirements. Higher oil prices can increase inflation, weaken the rupee and widen the trade deficit.
Therefore, market experts advise caution. Short-term recoveries may continue, but geopolitical tensions and energy prices will likely influence market direction in the coming weeks.
