MUMBAI: Stock market benchmark indices Sensex and Nifty surged in early trade on Wednesday following a sharp rally in global peers and a significant drop in crude oil prices after the US and Iran announced a two-week ceasefire.
The 30-share BSE Sensex jumped 2,775.73 points or 3.71 per cent to 77,392.31 in early trade. The 50-share NSE Nifty surged 815.2 points or 3.52 per cent to 23,938.85.
From the 30-Sensex firms, InterGlobe Aviation jumped the most by nearly 10 per cent. Larsen & Toubro, Bajaj Finance, Adani Ports, Bajaj Finserv and Mahindra & Mahindra were also among the prominent gainers.
Tech Mahindra emerged as the only laggard from the pack.
Brent crude, the global oil benchmark, tumbled 13.24 per cent to USD 94.80 per barrel.
"The key trigger is the announcement of a two-week pause in US military action, alongside Iran’s agreement to facilitate safe passage through the Strait of Hormuz. This has significantly reduced immediate concerns around energy supply disruptions, which had been a major overhang for global markets," Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.
He further added that the easing of geopolitical stress has led to a sharp fall in global crude oil prices, which is particularly positive for India from both inflation and currency perspectives.
In Asian markets, South Korea's benchmark Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index were trading significantly higher.
US markets ended flat on Tuesday.
"The 2-week ceasefire between the US and Iran has dramatically altered the near-term market scenario. The crash in Brent crude to USD 95 following the ceasefire will again turn the market bullish. This ceasefire, particularly the agreed reopening of Hormuz Strait, will embolden the bulls to charge again, aided by the fair market valuations," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
Meanwhile, markets are also awaiting the decision of the Monetary Policy Committee (MPC), headed by Reserve Bank Governor Sanjay Malhotra, to be announced at 10 am.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 8,692.11 crore on Tuesday, according to exchange data. Domestic Institutional Investors (DIIs), however, bought stocks worth Rs 7,979.50 crore.
On Tuesday, the Sensex jumped 509.73 points or 0.69 per cent to settle at 74,616.58. The Nifty climbed 155.40 points or 0.68 per cent to end at 23,123.65.