India's stock markets witnessed a sharp rally on Monday, with the Sensex and Nifty 50 surging over 2% in early trades, buoyed by two major global developments: the ceasefire agreement between India and Pakistan, and a trade deal struck between the US and China.

The BSE Sensex jumped 1,896.28 points (2.39%) to reach 81,350.75, while the Nifty 50 rose 605.2 points (2.52%) to 24,613.2.

Market analysts said the ceasefire has boosted investor sentiment, though some caution that any future violations could impact this momentum.

Meanwhile, optimism around global markets was supported by constructive trade talks between the US and China held in Geneva, aimed at de-escalating tariffs.

The US also announced a new executive order to reduce medication costs, which may impact pharmaceutical revenues, particularly affecting Indian exporters in that sector.

Almost all sectors showed gains, with mid- and small-cap stocks rising around 3%. Among the top performers on the Nifty were Adani Enterprises, Jio Financial Services, and Adani Ports. Volatility also dropped, with India VIX down 18.42% to 17.65.