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Iran Peace Deal Sends Oil Below $84, Lifts Indian Stocks 1.5%
India's Sensex and Nifty surged 1.5% as Brent crude collapsed 4.6% to $83.36 on a US-Iran peace deal reopening the Strait of Hormuz. Energy importers and aviation led gains.
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Indian stock indices jumped more than 1.5% in early trading Monday after the US and Iran finalized a peace deal ending 107 days of war and reopening the Strait of Hormuz. Brent crude fell 4.55% to $83.36 a barrel, its lowest since the conflict began.
The BSE Sensex climbed 1,112 points to 76,648, while the NSE Nifty rose 335 points to 23,956. Among Sensex components, InterGlobe Aviation, Bajaj Finance, Bajaj Finserv, UltraTech Cement, and Larsen & Toubro posted the largest gains. Sun Pharma was the sole decliner.
India imports about 85% of its crude oil requirements, so a sustained drop in Brent below $85 cuts fuel costs for airlines, reduces input expenses for paint and tyre companies, and improves the fiscal math on subsidies. The reopening of the Strait of Hormuz removes the supply risk premium that had added roughly $5 to $7 a barrel during the war, traders said. InterGlobe Aviation rose the most among Sensex stocks: jet fuel accounts for roughly 35 to 40% of an airline's operating cost, and a $10 drop in Brent typically trims fuel expense by about 3% for Indian carriers.