What led to stock market surge? Sensex jumps 787 points, Nifty at 22,968; Rs 5 lakh cr added to investors' wealth

Indian equity benchmarks rebounded sharply on Monday, recovering from early losses to extend gains for the third consecutive session, as value buying and optimism around easing geopolitical tensions lifted investor sentiment. The 30-share BSE Sensex pack surged 787.30 points or 1.07 per cent to close at 74,106.85, while the NSE Nifty index rose 255.15 points or 1.12 per cent to settle at 22,968.25.

Gains in index heavyweights such as HDFC Bank Ltd, Larsen & Toubro Ltd (L&T), Axis Bank Ltd, ICICI Bank Ltd, Bajaj Finance Ltd, Titan, Trent, State Bank of India (SBI), Tata Consultancy Services Ltd (TCS), Infosys Ltd, NTPC Ltd and UltraTech Cement Ltd supported the benchmarks, helping them move into positive territory after a weak start.

The rally added more than Rs 5 lakh crore to investors' wealth in a single session. The overall market capitalisation (m-cap) of BSE-listed companies increased by Rs 5.06 lakh crore to Rs 427.43 lakh crore from Rs 422.37 lakh crore in the previous session.

On the sectoral front, strong buying interest was seen in banking, financials, metals, automobile, IT, realty and consumer durables stocks, while energy and media shares ended lower. The broader market outperformed the benchmarks, with Nifty Midcap 100 rising 1.52 per cent and Nifty Smallcap 100 advancing 1.29 per cent.

Vinod Nair, Head of Research at Geojit Investments, said, "Domestic equities staged a strong rally as value buying gained traction. Crude prices softened marginally on reports of ceasefire efforts, while encouraging provisional banking data supported interest in rate-sensitive segments."

However, he added that the overall risk appetite remains cautious due to persistent inflationary pressures and concerns over potential disruptions to global trade.

"With the RBI policy, US CPI, crude trajectory, and geopolitical developments all converging this week, markets are likely to remain headline-driven. Given the deep discount in the broader market, there is meaningful upside potential if a credible ceasefire emerges, despite the prevailing sell-on-rise trend," Nair further said.

Kranthi Bathini, Equity Strategist at WealthMills Securities, said that news surfacing around a potential ceasefire in the US–Iran conflict and the possible reopening of the Strait of Hormuz has provided some positivity to the market today. However, he added that it remains important to monitor how the situation develops over the next couple of days.

On investment strategy, Deven Choksey, Managing Director at DRChoksey FinServ Pvt, advised investors to avoid taking overly aggressive bets and instead follow a disciplined approach.

"Keep adding into quality existing distressed stocks which you have shortlisted in your portfolio. This is the strategy which we are putting it across to people because we believe that even though some part of the fundamental picture, which used to be pretty much clear a couple of months back, has got a little distorted at this point of time," he said.