Indian stock markets witnessed a robust upturn today, propelled by an anticipated peace deal between the United States and Iran. The benchmark BSE Sensex surged by 1,110.70 points, or 1.47 percent, closing at 76,638.65. Concurrently, the Nifty 50 climbed 330.40 points, a 1.40 percent increase, reflecting broad-based market optimism.
US-Iran Deal Sparks Market Confidence
The primary catalyst for the market rally was the breakthrough in US-Iran negotiations, signaling an end to hostilities and the reopening of the Strait of Hormuz for commercial shipping. This development is expected to significantly impact global oil prices, leading to a sharp correction in Brent crude futures, which dipped below $84 in early trade.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, highlighted the positive implications for India. "With the dawn of peace in West Asia, hopefully, and the consequent sharp correction in Brent crude to below $84 in early trade, the prospects for the Indian economy and stock market have turned for the better," he stated. Vijayakumar suggested that GDP growth and CPI inflation projections for FY27 could be revised upward to 6.9 percent and 4.6 percent, respectively, in this changed scenario.
Key Sectors and Stocks See Strong Gains
The positive sentiment translated into significant gains across various sectors:
- Oil-Sensitive Stocks: Companies heavily reliant on crude oil prices, such as InterGlobe Aviation (IndiGo), BPCL, HPCL, and IOC, experienced surges of approximately 4 percent each. IndiGo shares, for instance, rose 3.65 percent to Rs 4,880.60 on the BSE, benefiting from lower jet fuel price expectations.
- Infrastructure and Banking: Larsen & Toubro Ltd (L&T), with its substantial exposure to West Asia, gained nearly 3 percent, closing at Rs 4,180.20. Banking stocks also recorded strong performances.
- Manufacturing: Shares of tyre, chemicals, and paints manufacturers, including Apollo Tyres, CEAT, and MRF, jumped between 3-4 percent.
Details of the Peace Agreement
SBI Securities confirmed that the US and Iran have agreed to a peace deal that will resolve all hostilities, including those in Lebanon, and ensure the reopening of the Strait of Hormuz. The official signing of this historic agreement is scheduled for June 19. News of the impending deal had already led to a sharp intra-day rally on Friday, with the Nifty 50 ending 2 percent higher.
According to the Islamic Republic of Iran Broadcasting (IRIB), the agreement marks the end of an “imposed war” and represents a victory for Iran’s steadfastness. Former US President Donald J. Trump also commented on the deal, stating, “This Great Deal will bring Peace and Security to the whole Region. Many presidents have tried to make Peace with Iran, and all have failed before me.”
Technical Outlook for Nifty
Aakash Shah, Technical Research Analyst at Choice Equity Broking, noted that the Nifty has confirmed a consolidation breakout after several sessions of range-bound movement. The formation of a strong bullish candle on Friday, coupled with a close above key retracement levels, indicates accumulating demand. Shah anticipates that “follow-through buying in the upcoming sessions would further validate the breakout and improve the probability of an extension toward higher resistance zones.”