Indian equity benchmark indices staged a strong recovery on 27 July, driven by a sharp pullback in global crude oil prices following an easing of US-Iran geopolitical tensions.
The decline in oil prices provided immediate relief to market sentiment, which had been weighed down by fears of supply disruptions in the Strait of Hormuz.
As geopolitical risks receded, investors rotated back into risk assets, supporting a broad-based rally across Indian markets.
The move underscores the continued sensitivity of emerging market equities to global energy costs and geopolitical stability.
With oil prices retreating, the immediate pressure on import bills and inflation expectations in India has eased, providing a tailwind for domestic equities.
Market participants will now focus on whether the geopolitical de-escalation holds and if oil prices can sustain their lower levels, which would support further risk-on flows into Asian markets.