Indian equities posted their largest weekly advance in over five years, halting a six-week decline, as a diplomatic agreement in West Asia reduced crude oil prices and enhanced market optimism.
The NSE Nifty 50 index rose 1.16% on Friday to close at 24,050.60, and the S&P BSE Sensex increased 1.2% to 77,550.25. Over the week, both benchmarks advanced about 6%, marking their biggest percentage increase since February 2021.
Geopolitical developments eased oil market pressures. A two-week pause in military actions between the United States and Iran allowed the reopening of the Strait of Hormuz, a vital pathway for global energy shipments. As a result, Brent crude prices dropped from $115 to between $95 and $98.
The upswing was widespread, with positive sentiment supporting sectors sensitive to interest rates.
Banking and automotive sectors led the gains, as the Nifty Bank index rose more than 8% for the week, and the auto index also performed strongly.
Market volatility decreased, with the India VIX falling nearly 20% across the five trading days to 19.23, indicating reduced hedging by investors.
The information technology sector was the only underperformer, weighed down by conservative profit margin outlooks from major companies like TCS, despite the overall positive mood.
Foreign institutional investors continued selling in March, though at a slower rate this week. Domestic institutional investors offered strong support, countering the outflows, while retail investors through mutual funds stayed active.
The Indian rupee strengthened to 92.41 against the US dollar, recovering from recent lows.
