The Indian stock market witnessed a significant rebound on Monday, May 12, 2025, with benchmark indices surging sharply on the back of easing geopolitical tensions. Both the Sensex and Nifty 50 opened with a gap-up and sustained momentum throughout the morning session. The rally was largely driven by positive sentiment following the announcement of a ceasefire agreement between India and Pakistan, which had been embroiled in escalating border tensions over the past few weeks.
As of 10:15 a.m. IST, the BSE Sensex jumped more than 2,500 points to hover around 81,689.46, while the Nifty 50 climbed by over 2.5% to trade at 24,700.05. The relief rally sparked renewed investor confidence, with broader markets outperforming the benchmarks — the Nifty Midcap 100 and Smallcap 100 indices gained over 3.1% and 3.5% respectively. Market participants interpreted the geopolitical resolution as a major de-risking event, which led to aggressive buying across sectors, especially in energy, real estate, and infrastructure stocks.
Among sectoral indices, the Nifty Energy index emerged as one of the top gainers. Stocks such as Oil and Natural Gas Corporation (ONGC) surged by over 4%, while Jindal Drilling and Aegis Logistics posted strong gains of 6.7% and 4.7%, respectively. The rally in oil and gas counters was attributed not only to the broader market sentiment but also to firm global crude oil prices and expectations of stronger domestic demand in the near term. Investors took this as a signal of improving macroeconomic stability in the region.
The real estate sector also experienced a robust uptrend, buoyed by stock-specific developments. Puravankara Limited stood out with a sharp 10% jump in its share price after the company announced a new joint venture with KVN Developers to build large-scale residential projects. This development reinforced investor confidence in the long-term growth prospects of the housing sector, especially in urban centers, and further added momentum to related counters like Godrej Properties and Sobha Ltd.
However, the pharmaceutical sector remained an outlier, trading in the red despite the overall bullish sentiment. The Nifty Pharma index dropped around 1.6% amid renewed concerns about pricing pressures in the U.S. market. U.S. President Trump signed an executive order proposing significant drug price cuts, which spooked investors across global pharmaceutical stocks. Indian majors such as Sun Pharma fell by over 4.6%, while Biocon, Lupin, and Divi’s Laboratories also declined. Market analysts expect regulatory scrutiny and margin compression to remain headwinds for Indian pharma exporters in the near term.
Nifty Soars as Geopolitical Tensions Ease, Q4 Earnings Impress & FIIs Return in Force
In terms of stock recommendations, brokerages have turned optimistic on certain large-cap names following the recent correction and market stabilization. Analysts at Motilal Oswal Financial Services have identified Indian Oil Corporation Ltd (IOCL) and Mahindra & Mahindra (M&M) as top picks for the week. IOCL is seen benefiting from strong refining margins and healthy product demand, while M&M is expected to continue its upward trajectory supported by strong auto sales and upcoming product launches in the SUV segment.
Meanwhile, commodities such as gold remained volatile as investors digested signals from the ceasefire, ongoing U.S.-China trade developments, and expectations around the U.S. Fed’s next move. Gold prices have been swinging within a narrow range, and analysts suggest maintaining a cautious outlook with a preference for staggered buying at lower levels.
In conclusion, the Indian stock market started the week on an upbeat note with a broad-based rally driven by geopolitical relief and sector-specific catalysts. While most sectors participated in the uptrend, selective weakness in pharmaceuticals and global macro uncertainties continue to warrant cautious optimism. Traders and investors are advised to remain nimble and monitor global cues, sector fundamentals, and institutional flows for sustained momentum.
