Indian shares post best day in two months on Mideast peace hopes

Indian shares joined a global market rally on Friday, logging their best session in two months, as crude prices slumped on hopes of a peace deal between the U.S. and Iran that could lead to a reopening of the Strait of Hormuz.

U.S. President Donald Trump said a deal could be signed as soon as this weekend, though Tehran noted it has not finalized a decision.

A pact would mark a major breakthrough in the conflict that started at February-end, which has dragged India’s benchmark Nifty 50 6.2% down.

On the day, the Nifty jumped 1.99% to 23,622.90 points while the BSE Sensex rose 2.3% to 75,527.95.

Global markets also gained, with Asian equities and Europe’s STOXX 600 rising 3.1% and 1.8%, as Brent fell 4% to $87 a barrel, a near two-month low.

“The decline in crude prices, easing geopolitical fears have helped sentiment recover and this could continue in the near term,” said Rajesh Palviya, head of research at Axis Direct.

Lower crude buoyed oil marketing companies, airlines, tyre, paint, and cement makers.

Analysts said cooler oil prices could reverse some of the record $30 billion in foreign equity outflows India has seen this year.

Shares got a late boost from likely foreign inflows into financials, said two traders.

For the week, India’s blue-chips snapped a two-week losing streak to advance 1.1% and 1.7%, respectively.

Financials led gains after the central bank eased overseas borrowing rules for lenders. Kotak Mahindra Bank, ICICI Bank, and HDFC Bank were among the top weekly gainers, rising about 6.9%, 6.2% and 3.4%, respectively.

Conversely, IT shares fell 4.2% on persistent worries over AI disruption and hot U.S. inflation data, which fuelled expectations of a Federal Reserve rate hike by year-end that could dent global technology spending.