Benchmarks Post Best Session in Two Months on US-Iran Peace Hopes

An end-of-day recap of all that transpired in the Indian markets, highlighting the major price movements and the factors driving them

Kagenmi

istock.com

By Dehuti Jani

June 12, 2026 at 11:51 AM IST

Indian equity benchmarks Indian equity benchmarks surged on Friday, recording their strongest single-day gains in two months, after crude oil prices tumbled on hopes of a potential peace agreement between the US and Iran that could reopen the Strait of Hormuz. The Nifty50 jumped 461.30 points or 1.99% to close at 23,622.90, while the BSE Sensex rallied 1,695.40 points or 2.3% to settle at 75,527.95.

Investor sentiment improved sharply after Donald Trump said a peace deal with Iran could be signed as early as this weekend, although Tehran indicated that discussions were still ongoing. Reports that the agreement could lead to the reopening of the Strait of Hormuz boosted risk appetite globally and triggered a sharp fall in Brent Crude prices.

Lower oil prices supported sectors sensitive to energy costs, including oil marketing companies, airlines, paint, tyre and cement stocks. Analysts said easing crude prices could also help reverse part of the nearly $30 billion in foreign equity outflows seen from Indian markets this year.

Financial and realty stocks led the rally, with the Nifty Financial Services and Nifty Realty indices gaining. Among Nifty50 gainers, Shriram Finance, Bajaj Finance and Larsen & Toubro led advances. Broader markets also rallied strongly, with the Nifty MidCap and Nifty SmallCap indices rising 2.43% and 2.8%, respectively.

Top Movers of the Day

HDFC Bank jumped about 3.6% to roughly ₹771.95, leading the Bank Nifty surge after sharp FII short‑covering and optimism from RBI’s FCNR(B) and bond‑inflow measures boosted large private lenders.

Axis Bank rallied around 2.7% to near ₹1,353, as the entire pack of 14 Bank Nifty constituents closed higher and investors chased high‑beta private banks in a broad financials‑led relief rally.

ICICI Bank gained about 1.75% to around ₹1,340, supported by strong buying in frontline banks as easing crude prices and rupee strength improved macro sentiment for rate‑sensitive financials.

AU Small Finance Bank surged roughly 6% to the ₹1,017.80, emerging as one of the top banking gainers on aggressive short‑covering and renewed interest in high‑growth lenders within the small finance space.

Shriram Finance rose about 8% to ₹958 as financials and NBFCs re‑rated on the back of lower crude, expectations of benign funding conditions and sharp improvement in risk sentiment.

Bajaj Finance advanced over 5% to ₹920, helped by the ferocious risk‑on rally in rate‑sensitive names and hopes that softer macro headwinds could support consumer finance growth.

Larsen & Toubro gained about 5% to ₹4,050, featuring among top Sensex movers as cyclical and infra plays rallied with falling oil, potential US‑Iran peace deal and global risk‑on cues lifting capex‑linked stocks.

Ashok Leyland shot up around 10% towards ₹152, riding the auto and commercial‑vehicle theme as easing crude and domestic cyclicals outperformed in the broad‑based index rally.

Aavas Financiers climbed roughly 5% to around ₹1,400, aided by the sharp rally in housing‑finance and NBFC names as bond yields cooled and sentiment turned positive towards financials.

Oil India and ONGC underperformed with Oil India down about 2% near ₹419 and ONGC also fell 2% to ₹246.95 as tumbling crude and expectations of easing sanctions weighed on upstream PSUs even while broader markets surged.

Futures & Options
Nifty June 2026 futures closed at closed at 23,714.80, a premium of 91.9 points over the spot Nifty 50 close of 23,622.90, reflecting strong bullish sentiment after easing geopolitical tensions and a sharp rally in equities. In the cash market, the Nifty 50 surged 461.30 points or 1.99%, while India VIX dropped 5.73% to 14.72, indicating a sharp cooling in market volatility expectations.

Among stock futures, HDFC Bank, Reliance Industries and Larsen & Toubro were the most actively traded contracts in the NSE F&O segment. The June 2026 derivatives series will expire on 30 June 2026.

Bonds
India’s government bondbenchmark yields declined sharply on Friday as falling crude oil prices and hopes of a potential US-Iran peace agreement boosted sentiment toward fixed-income assets. The benchmark 6.94% GS 2036 yield ended at 6.8957%, compared with 6.9240% on Thursday, touching a post-issuance low during the session. Traders said softer Brent Crude prices, expectations of stronger foreign inflows and supportive RBI measures continued to support demand for government securities.

Market participants said the sharp fall in oil prices improved the macro outlook for India, a major crude importer, though volatility could persist depending on developments around the proposed US-Iran peace deal.

Meanwhile, the Reserve Bank of India sold 210 billion rupees of the 6.36% GS 2031 bond and 110 billion rupees of the 7.71% GS 2066 bond at Friday’s auction. The 6.36% 2031 paper was cut off at a yield of 6.5006%, while the 7.71% 2066 bond was sold at a cut-off yield of 7.6345%, broadly in line with market expectations.

Forex
Indian rupee strengthened against the dollar on Friday as growing hopes of a U.S.–Iran peace agreement sent oil prices sharply lower and prompted an unwinding of long dollar positions. The currency opened firmer at 95.32 per dollar, briefly dipped to 95.52 during a volatile session amid dollar demand from corporates and importers, then rallied to a one‑week high of 94.9550 before settling at 95.11, a 0.7% gain on the day.

Reports of a possible deal between Washington and Tehran eased fears over India’s import bill and external balances by pushing crude prices deeper into the red. Despite the intraday strength, the rupee still recorded its first weekly decline after three consecutive weeks of gains.

Crypto
Crypto markets rallied on Friday as improving geopolitical sentiment boosted appetite for risk assets globally. The total crypto market capitalisation rose nearly 2% to around $2.15 trillion after a volatile week. Bitcoin traded near $63,770, up around 1.5% over the past 24 hours, stabilising after briefly falling toward the $60,000 level earlier in the week. Ethereum also advanced, rising about 1.4% to trade near $1,680.

Market sentiment improved sharply after Donald Trump said planned US military strikes on Iran had been cancelled and indicated that an interim peace agreement could be signed in Europe as early as this weekend. The development pushed oil prices lower and triggered a broader rally across global equities and digital assets.

US Stock Futures
US stock futures advanced on Friday after reports that a proposed peace agreement between the US and Iran could lead to the reopening of the Strait of Hormuz, improving global risk sentiment. Futures linked to the S&P 500 rose around 0.6%, while Nasdaq-100 futures also gained roughly 0.6%. Futures tied to the Dow Jones Industrial Average climbed 363 points, or 0.7%.

Iranian state media reported that the draft US-Iran memorandum of understanding includes commitments from Washington to ease oil sanctions and from Tehran to reopen the Strait of Hormuz, a key global energy supply route. Investor sentiment further improved after reports that a potential peace agreement could be signed in Switzerland as early as Sunday.

US Treasury Notes
US Treasury yields held near recent lows on Friday as easing geopolitical tensions triggered strong buying in government bonds. The benchmark 10-year Treasury yield hovered near 4.459%, stabilising after a sharp decline of around 10 basis points from the previous session’s highs. The policy-sensitive 2-year Treasury yield also remained lower near 4.062%.

Bond markets rallied after Donald Trump said planned US military strikes on Iran had been cancelled and indicated that an interim peace agreement could be reached soon in Europe. The development eased immediate inflation concerns by pulling down oil prices and reversing part of the recent rise in yields driven by strong US economic data and geopolitical risks.

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