- Sensex and Nifty rebounded after Trump paused Project Freedom in Strait of Hormuz
- Nifty 50 gained up to 0.9%, Sensex rose 0.9%, led by PSU Bank and IT sectors
- Trump cited progress with Iran toward a final agreement, maintaining naval blockade
Benchmarks Sensex and Nifty rebounded on May 6, after US President Donald Trump on Wednesday briefly paused 'Project Freedom' in the Strait of Hormuz, citing significant progress toward a final agreement with Iran. However, he emphasized that the US naval blockade will remain fully in force. Trump had launched the 'humanitarian' initiative on behalf of the US, Middle East countries and Iran, to help transit ships locked in the key waterways.
Nifty 50 rose as much as 0.9% to 24,250 in early trade, and Sensex climbed up to 657 points, or 0.9%, to 77,675.
At 9:25 am, the Nifty was up over 160 points, or 0.66%, at 24,191.80, while the Sensex surged over 486 points, or 0.63%, to 77,506.
Most sectoral indices traded in the green, with gains led by the PSU Bank, and IT, followed by Auto, Bank, and Financial Services. Only FMCG and Energy are trading in the red.
Add image caption here
The recovery extended to the broader indices as well, with Nifty Smallcap 250 gaining by over 0.69%, while the Midcap 150 rose 0.97%.
Here are three reasons why the market is rallying today.
Iran-US War "Concluded"
US President Donald Trump has suspended “Project Freedom,” to escort ships through the Strait of Hormuz, claiming progress in negotiations with Iran toward an agreement to end the war. In a post on Truth Social, Trump said, “Great progress has been made toward a complete and final agreement with representatives of Iran."
The United States and its Gulf allies have proposed a UN resolution threatening Iran with sanctions or other measures if it doesn't halt attacks on ships in the Strait of Hormuz, stop imposing “illegal tolls,” and disclose the placement of all mines to allow freedom of navigation.
Earlier, Secretary of State Marco Rubio declared that “Operation Epic Fury is concluded,” signalling the end of a key phase of US-Israel military action 66 days after it began. Defence Secretary Pete Hegseth also reinforced that a fragile truce remains intact, even as sporadic tensions persist in the region.
Get the latest updates on the US-Iran war here.
Oil Prices Slump
Oil prices fell for a second straight session, unwinding part of their war-driven surge as signs of diplomatic progress between the US and Iran cooled supply fears. Brent crude drifted toward $108 a barrel after tumbling 4% in the previous session, while West Texas Intermediate hovered near $100.
The broader oil market remains tight despite the pullback in prices. Since the conflict began in late February, Brent has surged roughly 50%, reflecting the removal of hundreds of millions of barrels of Persian Gulf supply from global markets.
ALSO READ: Brent Crude Slips Toward $108 As Trump Signals 'Great Progress' On Iran Deal
Global Market Cues
Global markets were also rallying today. South Korea's Kospi crossed the 7,000 mark for the first time on Wednesday, rising as much as 5.8% to 7,338.61. Asian markets advanced after signs of easing tensions in the Middle East pushed oil prices lower. Australia's S&P/ASX 200 rose 0.58%, while Hang Seng futures traded below the index's previous close. Japanese markets were shut for a public holiday.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.