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Markets surge 2%: Nifty above 23,600: Five key factors behind broad-based rally
Sensex, Nifty rose, tracking gains in other Asian markets, as oil prices fell on hopes of a US-Iran peace deal.
The benchmark equity indices Sensex and Nifty rebounded sharply on Friday from previous session’s decline, tracking reports from Iranian state-linked news agency Mehr that the proposed MoU between Tehran and Washington includes the lifting of sanctions, an end to the US naval blockade at Strait of Hormuz.
A rally in global markets and a decline in crude oil prices after US President Donald Trump said the United States has ended the war with Iran.
At 3:05 p.m. the Sensex was up 1,728.66 points or 2.34 percent at 75,561.20, while the broader Nifty advanced to 23,635.35, up 473.75 points or 2.05 percent.
All 16 major sectoral indices traded in the green. The broader Nifty Smallcap 100 and Nifty Midcap 100 advanced 1.6 percent and 1.4 percent, respectively.
Oil marketing companies BPCL, HPCL and Indian Oil gained between 2.4 percent and 3.8 percent, while airline operator IndiGo rose 3.5 percent, aided by lower oil prices.
Shares of paint, tyre and cement companies, which also benefit from softer crude prices, were trading higher.
Infrastructure major Larsen & Toubro, which has significant exposure to West Asia, climbed 2.8 percent.
Heavyweight banking and financial stocks rose 1.4 percent each and were headed for their third gain in four sessions after the Reserve Bank of India detailed a concessional forex swap facility for banks’ overseas foreign-currency borrowings.
“As banks swap dollar deposits with the RBI, this should improve their rupee liquidity positions over the next four months, reducing their reliance on the higher cost of deposit, allowing them to increase lending,” Nomura analysts said in a note.
Key factors behind market rally
1) Easing geopolitical tensions:Â Iranian state-linked news agency Mehr has reported that the proposed memorandum of understanding between Tehran and Washington includes the lifting of sanctions, an end to the US naval blockade at the Strait of Hormuz and the withdrawal of American military forces positioned around Iran.
US President Donald Trump said a deal to end the war with Iran is nearly complete and could be signed over the weekend in Europe. The announcement came after he called off military strikes on Iran hours after threatening to take control of its oil industry.
Speaking to reporters in the Oval Office on Thursday, Trump said Vice President J D Vance is expected to attend the signing ceremony. Later, while addressing a tele-rally in support of Georgia Lt Governor Burt Jones, who is contesting for governor, Trump said the US had ended the war with Iran.
“I don’t know if you heard, but we ended the war with Iran today (Thursday), and they have agreed never to have a nuclear weapon, something that we insisted on. That was the whole purpose,” Trump said.
2) Crude prices decline:Â Brent crude, the global oil benchmark, fell 5 percent to USD 86.4 per barrel, hovering near a two-month low.
Lower crude oil prices are positive for India as the country imports a large share of its oil requirements. A fall in prices helps reduce the import bill, eases pressure on the trade deficit and the rupee, and lowers input costs for sectors such as transport, aviation and manufacturing. It can also help contain inflationary pressures.
“For India, the most significant macro development is the sharp decline in crude oil prices. Brent crude has corrected nearly 4 percent, easing concerns around imported inflation, the current account deficit, and rupee stability,” said Hariprasad K, Research Analyst and Founder, Livelong Wealth.
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3) Firm global cues: Asian markets were trading higher, with South Korea’s Kospi rising more than 8 percent and Japan’s Nikkei 225 advancing over 3 percent. China’s Shanghai SSE Composite and Hong Kong’s Hang Seng index were also in positive territory. US markets ended significantly higher on Thursday.
“The biggest overnight trigger came from the United States, where markets rebounded strongly after President Donald Trump signalled a diplomatic breakthrough with Iran and called off planned military strikes. The development significantly reduced geopolitical risk premiums that had been weighing on global equities and energy markets over the past week,” Hariprasad K said.
4) Rupee rises: The rupee appreciated 65 paise to 95.20 against the US dollar as global crude oil prices retreated following indications of an imminent deal between the US and Iran. According to forex traders, a weaker dollar and positive sentiment in domestic equities also supported the local currency. At the interbank foreign exchange market, the rupee opened at 95.40 and strengthened further to 95.20 against the greenback.
5) India VIX declines: India VIX, the market’s fear gauge, declined 5.16 percent to 14.81 level. A fall in the volatility index indicates easing concerns among investors and reflects improved market sentiment. Lower volatility generally supports risk appetite and is considered favourable for equities.
Technical Outlook
Anand James, Chief Market Strategist at Geojit Investments, said that for the second consecutive day, upswing attempts got turned lower from the vicinity of the 10-day SMA. The drop thereafter eased after testing June 8’s low, suggesting that bears are not that dominant either.
“Directional trades appear to be waiting for a breach of the 23,400-23,070 range, with 23,500-23,800 and 22,800 seen as the initial upside and downside objectives, respectively. That said, we prefer to see 23,200 as the key pivot for the day,” James said.
(With inputs from Reuters)
Yes, the US-Iran deal is expected to boost market sentiment. Hopes of a US-Iran peace deal have contributed to a significant surge in Indian stock markets, with the Sensex rising nearly 1,000 points and the Nifty crossing 23,400 on Friday, June 12, 2026.
The Nifty faces immediate resistance near 23,400. A decisive move above 23,500 could accelerate momentum towards 23,700 and higher levels. On the downside, 23,100 remains an important support.
Falling oil prices are expected to provide significant relief to the Indian economy by reducing inflationary pressures, improving the fiscal outlook, and easing concerns over corporate profitability.
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