Indian shares jump to two-week high as oil drops on Mideast peace talk hopes

Indian shares rose to a two-week high on Monday as signs of progress in U.S.-Iran peace talks pushed oil prices lower and boosted appetite for risk assets.

U.S. President Donald Trump said on Saturday that Washington and Iran had “largely negotiated” a memorandum of understanding on a peace deal that would reopen the Strait of Hormuz, which carried a fifth of global oil and LNG shipments before the war.

The comments pushed Brent crude futures down 5.5% to $97.8 per barrel - its lowest in two weeks.

India’s benchmark Nifty 50 rose 1.32% to 24,031.70 and the BSE Sensex added 1.42% to 76,488.96. This was their highest close since May 8, 2026.

Gains, however, were capped as U.S. and Iranian officials played down hopes for an imminent breakthrough, analysts said.

Fifteen of the 16 major sectors rose. The small-cap and mid-cap indexes gained 1.4% and 0.9%, respectively.

Heavyweight financials jumped 2.2%, led by 2.6% and 2.3% jump in India’s largest private sector lenders HDFC Bank and ICICI Bank.

“Banking stocks were among the worst hit in this sell-off due to higher foreign investor holding and concerns over macroeconomic impact of the Iran war. We are seeing some reversal of that now as there are signs of progress in U.S.-Iran talks,” said Anita Gandhi, head of institutional business at Arihant Capital Markets.

Foreign portfolio investors have offloaded domestic stocks worth $23.86 billion so far this year, surpassing last year’s record annual outflows.

India on Monday raised petrol and diesel prices for a fourth time in May, while pushed omarketing companies BPCL, HPCL, Indian Oil gained between 3.2% and 4.3%.

Max Healthcare shed 2.2%, marking second session of losses, after reporting slower-than-expected growth in the fourth quarter.