Indian Markets Rally as US-Iran Peace Deal Lowers Oil

Indian equity markets experienced significant volatility and eventual gains between June 22 and June 25, 2026, primarily driven by geopolitical developments in West Asia. The BSE Sensex and NSE Nifty rallied after the Federal government of the United States and Iran agreed to a 60-day roadmap toward a final peace deal in Switzerland. This diplomatic progress, which included a 60-day waiver of sanctions on Tehran, allowed shipping to resume through the Strait of Hormuz and pushed Brent crude prices from near $80 per barrel down to approximately $72 per barrel by June 25.

Market momentum was further supported by the Reserve Bank of India, whose Governor Sanjay Malhotra stated that interest rate hikes were premature. The central bank also permitted loans against foreign-currency deposits, boosting banking and financial stocks. Despite these gains, the market faced headwinds from a global tech-led sell-off on June 23, which saw the Sensex drop over 800 points, and ongoing concerns regarding a 43% monsoon deficiency that analysts warn could impact rural demand and corporate profits.

By June 25, the Sensex settled at 77,100.47 and the Nifty at 24,056. The recovery was led by aviation and automobile stocks, such as InterGlobe Aviation, which benefited from lower fuel costs. Investors also reacted positively to reports that the United States and India were nearing a historic bilateral trade deal, though gains were periodically capped by foreign institutional investor outflows and profit-booking in the IT and metal sectors.