Peace rally lifts markets after a turbulent week

As crude slips below $90, buyers who had stayed away during the week, stream in

- Mayur Bhalerao & Nitin Kiran

A quick sprint on Friday helped Indian markets close a volatile week with solid gains, as signs of peace in West Asia rekindled investor optimism worldwide.

As crude oil slipped below $90 a barrel, buyers who had stayed away during a turbulent week trooped in, helping the Street clock the best gains in eight weeks.

The Sensex rose 1.7% over the week, while the Nifty gained 1.1%. Most of the gains came on Friday, when the Nifty jumped 2% to close at 23,622.90 and the Sensex 2.3% to 75,527.94, the highest close for both since 8 April. On that day, Indian equities had rallied nearly 4%, cheered by a US-Iran ceasefire announcement.

Volatility cooled sharply: the India VIX, which measures expected market volatility, declined from around 17 to 14.7 during the week, slipping below the key 15-mark for the first time since the war erupted in West Asia. On 27 February, a day before the conflict flared, the VIX was at 13.70.

US President Donald Trump on Thursday announced that a deal to end the conflict and reopen the crucial Strait of Hormuz could be signed as early as this weekend, lifting sentiment globally, even as Tehran said that a final decision was pending. Trump also called off military strikes on the Islamic Republic hours after threatening to take control of its oil industry.