US-Iran Peace Deal Stabilizes Indian Stock Markets

Indian equity markets ended a volatile week on a positive note, with the Nifty 50 rising 1.10% to 23,622.90 and the Sensex advancing 1.73% to 75,527.95. This recovery follows a two-week losing streak driven by the US-Iran war, which had pressured markets through rising crude oil prices, inflation risks, and foreign institutional investor outflows.

Donald Trump, President of the United States, announced that a peace agreement with Iran would be signed on June 14 to end the regional conflict. This diplomatic breakthrough and the subsequent reopening of the Strait of Hormuz led to a drop in crude oil prices to their lowest levels since the conflict began, providing relief to India's oil-dependent economy.

Market volatility is expected to continue as investors await the US Federal Reserve's Federal Open Market Committee meeting on June 16-17 for signals on inflation and rate cuts. To further strengthen liquidity and encourage foreign currency inflows, the Reserve Bank of India introduced forex swap facilities for eligible external commercial borrowings and fresh FCNR(B) deposits.