Equities Rally as Oil Slumps on Hopes of US-Iran Peace Deal

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

May 6, 2026 at 11:33 AM IST

Indian equities surged on Wednesday as hopes of a potential US-Iran agreement to end the West Asia conflict triggered a sharp fall in crude oil prices, easing concerns around inflation and economic growth. The Nifty50 climbed 1.24% to 24,330.95, while the BSE Sensex advanced 1.22% to 77,958.52, marking their biggest single-day gains since April 15.

Sentiment improved significantly after reports suggested Washington and Tehran were close to signing a framework agreement aimed at ending the conflict and restarting broader nuclear negotiations. Brent Crude prices plunged nearly 7.0% to around $102 per barrel after touching elevated levels earlier this week, providing relief to markets concerned about imported inflation and pressure on India’s external balances.

Banking and financial stocks led the rally after the Indian government approved a ₹190 billion credit guarantee scheme to support businesses affected by the Iran conflict. InterGlobe Aviation, Tata Motors and Shriram Finance emerged as the top gainers on the Nifty50 index.

Broader markets outperformed the benchmarks, with the Nifty MidCap and Nifty SmallCap indices rising 1.76% and 1.93%, respectively. Sectorally, PSU banks, private banks, realty and financial services stocks led gains, while FMCG stocks lagged amid mild profit booking.

Top Movers of the Day
Coforge surged around 9.5% to ₹1,280 after reporting strong Q4FY26 earnings, with investors cheering robust profit growth and improved revenue visibility.

Wockhardt rallied nearly 9.3% to ₹1,680 on continued momentum after strong quarterly earnings and optimism around its antibiotic pipeline.

SRF gained over 8% to ₹2,725 after reporting an 11% YoY rise in Q4 consolidated profit and announcing ₹23 billion capex plans in Odisha.

Punjab National Bank rose 2.23% to ₹110.30 after reporting a 14% YoY increase in Q4FY26 net profit, although brokerages trimmed target prices.

Vedanta extended gains and climbed over 4.5% to ₹317.50, taking its four-day post-demerger rally above 9.%.

Bajaj Auto gained 3.42% to ₹10,390 ahead of its board meeting to consider a share buyback proposal.

Hero MotoCorp gained 1.4% to end at ₹5,180 after reporting a 30% YoY jump in Q4 profit driven by strong domestic demand and premium motorcycle sales growth.

InterGlobe Aviation (Indigo) surged 6.7% to ₹4,524 after the government approved ECLGS 5.0 support measures for airlines amid the West Asia crisis.

SpiceJet hit the 5.0% to ₹12.70 upper circuit following the government’s emergency credit support announcement for the aviation sector.

Raymond gained 9.0% after its Q4FY26 profit improved sharply on a sequential basis, boosting investor sentiment.

KPI Green Energy climbed 6.7% to ₹486.8 after reporting over 49% YoY growth in Q4FY26 net profit.

Futures & Options
Nifty May 2026 futures closed at 24,466.30, a premium of 135.35 points over the spot Nifty 50 close of 24,330.95, reflecting strong bullish positioning in the derivatives market. In the cash market, the Nifty 50 surged 298.15 points or 1.24%.

Market volatility eased significantly, with India VIX declining 6.86% to 16.68 as easing oil prices and hopes of a US-Iran agreement improved sentiment. In the F&O segment, HDFC Bank, Larsen & Toubro and Coforge were the most actively traded stock futures contracts. The May 2026 derivatives series will expire on 26 May 2026.

Bonds
India's government bond yields fell on Wednesday as easing crude oil prices and optimism around a potential US-Iran peace agreement improved investor sentiment and reduced inflation concerns. The benchmark 6.48% 2035 government bond yield fell sharply to 6.9219% from 7.0184% in the previous session, with bond prices moving higher.

The rally was driven by a decline in Brent Crude prices after reports suggested progress toward a diplomatic framework between Washington and Tehran. Expectations of improved Middle East oil supply conditions helped ease fears around imported inflation and pressure on India’s macroeconomic outlook.

Forex
Indian rupee recorded its strongest single-day gain in a month on Wednesday as easing geopolitical tensions and falling oil prices triggered a broad relief rally across Asian currencies. The rupee strengthened 0.7% to close at 94.61 per US dollar after touching a record low of 95.4325 in the previous session.

Sentiment improved after reports suggested the US and Iran were nearing a memorandum of understanding aimed at ending the conflict and creating a framework for future nuclear negotiations. Brent Crude prices fell nearly 7.0% to around $102 per barrel following signs of diplomatic progress and comments from Donald Trump hinting at a possible agreement.

Crypto
Crypto markets traded with a positive bias on Wednesday as easing geopolitical tensions and softer oil prices improved appetite for risk assets. Bitcoin rose 0.75% to trade near $81,359, holding firmly above the key $80,000 support level. Investor sentiment improved after Donald Trump paused “Project Freedom,” which helped pull Brent Crude prices lower toward $107 per barrel and reduced immediate macroeconomic concerns.

Most major cryptocurrencies traded in positive territory, although Ethereum slipped 0.38% to around $2,370. Market participants continued to navigate sharp swings driven by changing geopolitical developments and policy signals linked to the US-Iran conflict.

US Stock Futures
US stock futures surged on Wednesday after reports indicated that the US and Iran were nearing an agreement to end the ongoing conflict in West Asia, boosting global risk sentiment. Futures linked to the Dow Jones Industrial Average jumped 544 points, or 1.1%, while S&P 500 futures gained 0.9%. Nasdaq-100 futures outperformed with a 1.6% rise, supported by renewed buying in technology stocks.

Investor optimism strengthened after reports suggested Washington and Tehran were close to a framework agreement that could end hostilities and include a moratorium on nuclear enrichment. Iranian officials also confirmed that Tehran was evaluating a US proposal, raising hopes for a diplomatic breakthrough and easing concerns around energy prices, inflation and global growth.

US Treasury Notes
Yields on US Treasury moved lower on Wednesday as easing geopolitical tensions and falling oil prices improved sentiment in global bond markets. The benchmark 10-year Treasury yield traded around 4.336%, down roughly 8 basis points from recent highs, while the policy-sensitive 2-year Treasury yield softened to around 3.843%.

Investor optimism increased after reports suggested the US and Iran were nearing a diplomatic agreement, which helped cool immediate inflation concerns by pushing Brent Crude prices lower. The decline in yields reflected stronger demand for Treasuries, with prices on the 10-year note rising during early trading as markets reassessed expectations around inflation and future Federal Reserve policy.

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