Indian equities rallied sharply on Monday as falling crude oil prices boosted shares of companies that benefit from lower energy and raw material costs. Optimism surrounding a potential U.S.-Iran peace agreement triggered a sharp decline in global oil prices, lifting market sentiment.

By mid-morning, the Sensex had jumped over 1,100 points while the Nifty gained more than 325 points, with broad-based buying seen across sectors.

Airlines, Paints and Tyres Lead Gains

Among the biggest beneficiaries was InterGlobe Aviation, whose shares rose more than 4% as lower aviation turbine fuel costs are expected to improve profitability.

Paint manufacturers also advanced strongly, with Asian Paints, Berger Paints, and Kansai Nerolac posting solid gains. These companies use several crude oil-derived inputs in their products, making lower oil prices a positive for margins.

Tyre stocks joined the rally as raw material costs are closely linked to petroleum products. Shares of Apollo Tyres and JK Tyre & Industries rose sharply in early trading.

Oil Marketing Companies Gain

State-run fuel retailers also benefited from the decline in crude prices. Shares of Bharat Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited, and Indian Oil Corporation climbed as lower crude costs can improve fuel marketing margins and reduce working capital requirements.

Upstream Oil Producers Under Pressure

In contrast, oil exploration and production companies lagged the broader market. Shares of Oil India Limited and Oil and Natural Gas Corporation declined, as lower oil prices can reduce revenue realization and profitability for upstream producers.

Crude Oil Falls Sharply

Brent crude dropped nearly 5% to around $83 per barrel, while U.S. West Texas Intermediate crude fell more than 5% to roughly $80 per barrel. The decline followed reports that the United States and Iran had reached a tentative agreement that could ease geopolitical tensions and reduce the risk of supply disruptions through the Strait of Hormuz.

Lower energy prices also improved the broader economic outlook by reducing inflation concerns and potentially easing pressure on central banks to keep interest rates elevated.

As a result, the Nifty Oil & Gas index moved higher alongside the broader market, while investors rotated into sectors expected to benefit most from cheaper crude oil.