Key gauges end higher on hopes for US-Iran peace deal

Indian equity benchmarks saw strong buying momentum and ended sharply higher on Friday, in tandem with a rally in global markets and a decline in crude oil prices after US President Donald Trump declared that his country has ended the war with Iran. 

Some of the important factors in trade:  

India’s growth to slow down in FY27, but still to remain fastest-growing major economy: The World Bank, in its report has said that India’s economic growth is likely to moderate to 6.6 per cent in FY27, down from 7.7 per cent in the previous year. Despite this slowdown, India is likely to retain its position as the world’s fastest-growing major economy. 

Bank credit grows over 17% in May: The Reserve Bank data showed bank credit grew 17.44 per cent year-on-year in May, marking the ninth consecutive month of double-digit expansion, reflecting sustained demand for loans from both retail and corporate borrowers. 

Need to strengthen multilateral cooperation to deal with challenges posed by conflicts: Finance Minister Nirmala Sitharaman has said that the adverse impact of conflicts and uncertainty falls disproportionately on developing countries and the Global South, and there is a need for coordinated global action to deal with it. 

Textile stocks remain in watch: Union Textiles Minister Giriraj Singh has said that the government is targeting to increase size of India’s textile market, including domestic as well as exports, from around Rs 16 lakh crore at present to Rs 33 lakh crore by 2030-31. 

Global front: European markets were trading higher amid rising optimism about Iran and the U.S. reaching a peace deal. Asian markets settled higher after U.S. President Donald Trump called off new military strikes on Iran and said a peace deal could be signed in a few days, helping ease fears of escalation. 

Finally, the BSE Sensex rose 1695.40 points or 2.30% to 75,527.95 and the CNX Nifty was up by 461.30 points or 1.99% to 23,622.90. 

The BSE Sensex touched high and low of 75,608.02 and 74,453.39, respectively. There were 28 stocks advancing against 2 stocks declining on the index.

The top gaining sectoral indices on the BSE were Realty up by 3.55%, Industrials up by 3.45%, Bankex up by 2.94%, Telecom up by 2.69% and Consumer Durables up by 2.59%, while there were no losing sectoral indices on the BSE. 

The top gainers on the Sensex were Bajaj Finance up by 5.56%, Larsen & Toubro up by 4.94%, Interglobe Aviation up by 4.59%, Titan Company up by 4.03% and HDFC Bank up by 3.73%. On the flip side, Tech Mahindra down by 2.24%, Power Grid Corporation down by 0.58% and Tata Steel down by 0.08% were the top losers.

Meanwhile, the World Bank, in its Global Economic Prospects report, has said that India’s economic growth is likely to moderate to 6.6 per cent in fiscal year 2026-27 (FY27), down from 7.7 per cent in the previous year. Despite this slowdown, India is likely to retain its position as the world’s fastest-growing major economy. The moderation in growth is attributed to slower private demand, driven by higher energy prices and rising input costs. However, the report noted that reductions in Goods and Services Tax (GST) rates are expected to provide some support to consumer demand. It also projected that economic growth would rebound to 7.2 per cent in FY28.

The report further highlighted that, despite heightened uncertainty arising from the ongoing conflict, India’s economic activity remained robust in the early part of the year, supported by resilient domestic demand. Private consumption, particularly in rural areas, remained strong, while urban demand showed signs of recovery. It also noted a steady increase in tax collections from domestic sales. To ease inflationary pressures stemming from higher energy costs and shortages of agricultural products - especially fertilizers- the government has implemented several measures, including reductions in fuel taxes.

It said ‘Reduced US tariffs and the expected implementation of free trade agreements will likely mitigate the impact of weaker external demand due to the conflict, particularly on merchandise exports’. It further said ‘Growth is then anticipated to rebound over the next two fiscal years, driven by firming domestic demand and a pickup in export growth’. In per capita terms, growth in Emerging Markets and Developing Economies (EMDEs) in 2026 is projected to slow to its weakest pace since the pandemic, with the conflict and lingering disruptions impacting EMDEs to varying degrees.

In EMDEs, excluding China and India, subdued per capita income growth is expected to lead to nearly a decade of lost income convergence with advanced economies by 2028. Moreover, growth in the South Asia Region is expected to soften to 6.3 per cent in 2026, mainly reflecting the adverse impact of the conflict in the Middle East, including higher energy prices, reduced supplies of oil and natural gas, and disruptions to remittances and tourism.

CNX Nifty touched high and low of 23,645.35 and 23,313.90, respectively. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Shriram Finance up by 8.10%, Bajaj Finance up by 5.68%, Larsen & Toubro up by 4.87%, Interglobe Aviation up by 4.50% and Tata Motors Passenger Vehicles up by 4.02%. On the flip side, Nestle down by 3.23%, ONGC down by 2.24%, Tech Mahindra down by 2.18%, SBI Life Insurance down by 0.81% and Tata Consumer Product down by 0.71% were the top losers. 

European markets were trading higher; UK’s FTSE 100 increased 111.82 points or 1.09% to 10,415.70, France’s CAC rose 148 points or 1.8% to 8,348.80 and Germany’s DAX gained 308.79 points or 1.28% to 24,518.50.

Asian markets settled higher on Friday tracking Wall Street’s gains overnight after US President Donald Trump called off new military strikes on Iran and said a peace deal could be signed in a few days, helping ease concerns about conflict-driven inflation and potential interest rate hikes. Moreover, falling crude oil prices also boosted market sentiments. Chinese shares rallied as e-commerce stocks rebounded after falling in the previous session following Beijing’s regulatory warning to major online shopping platforms over misleading sales tactics during the country’s major 618 shopping festival. Seoul shares surged over 4% as foreign investors turned net buyers for the first time in 25 trading sessions.