Indian equity markets opened sharply higher on Friday, riding a wave of global optimism after US President Donald Trump called off planned military strikes on Iran and signalled that a peace deal between the two nations could be signed as early as this weekend in Europe.
The Sensex hit an intraday morning high of 74,859.16, surging over 1,026 points from Thursday's close, while the Nifty climbed to a morning high of 23,373.20, up by 211 points.
The diplomatic breakthrough dramatically reduced the geopolitical risk that had been weighing on global markets for weeks. Asian markets responded aggressively, with South Korea's Kospi jumping over 8 per cent and Japan's Nikkei 225 climbing more than 3 per cent. US markets had already closed significantly higher on Thursday.
For India, the most consequential knock-on effect was a sharp fall in oil prices. Brent crude dropped approximately 1.6 per cent to around $88.92 a barrel, near two-month lows, easing fears around imported inflation, the current account deficit, and rupee stability.
Oil marketing companies BPCL, HPCL, and Indian Oil rose between 2.4 and 3.8 per cent, while airline IndiGo gained 3.5 per cent. Infrastructure major Larsen & Toubro, which has significant exposure to the Middle East, climbed 2.8 per cent.
All 16 major sectors posted gains. Broader market indices also advanced, with mid-caps and small-caps rising 1.4 and 1.6 per cent, respectively. Adding to the positive mood, the Reserve Bank of India's announcement of a concessional forex swap facility for banks' overseas foreign-currency borrowings lifted banking stocks, with heavyweights rising 1.4 per cent and heading for their third gain in four sessions.
Iran, however, cautioned that a final agreement had not yet been reached, leaving some uncertainty around the weekend signing.
