Indian financial markets rallied on Monday as a sharp decline in crude oil prices helped reverse a five-day losing streak for equities.
The energy price drop followed reports of a pause in military strikes between the United States and Iran, which significantly reduced immediate fears of supply disruptions in the Strait of Hormuz.
This geopolitical de-escalation provided a crucial tailwind for Indian assets, which had been under pressure from elevated energy import costs and currency volatility.
The retreat in oil prices coincided with renewed confidence in the Indian rupee, which strengthened against the US dollar.
The currency's recovery was bolstered by assurances from the Reserve Bank of India (RBI), which helped calm investor anxiety regarding the currency's recent slide toward a two-month low.
With the import bill pressure easing, the RBI's policy stance appeared more effective in stabilizing the external sector, allowing the rupee to firm up in the session.