Global markets surged on hopes of a breakthrough peace agreement in West Asia, with crude oil prices falling sharply and risk appetite returning across equities. US stock futures jumped, Asian markets rallied by as much as 6 percent, and investors are increasingly betting that lower energy prices could ease inflationary pressures worldwide.
For India, the combination of falling oil prices, improving global sentiment and renewed foreign investor interest could push the Nifty closer to the 24,000 mark in the near term.
US President Donald Trump and Pakistan Prime Minister Shehbaz Sharif separately announced that Washington and Tehran had reached an understanding, with a formal agreement expected to be signed in Geneva later this week. Iran also indicated its willingness to end hostilities.
Unlike previous ceasefire announcements that were met with scepticism, the latest developments have been accompanied by fewer conflicting signals, prompting markets to believe that a lasting agreement may be within reach.
Gift Nifty, which closed at 23,695 on Friday, climbed to 23,993 in early trading, indicating a strong start for Indian equities.
While geopolitical tensions appear to be easing, investors are now focused on the US Federal Reserve's policy meeting beginning on Tuesday.
US retail inflation accelerated to 4.23 percent in May, the highest level in three years, which would normally strengthen the case for higher interest rates. However, the sharp decline in crude oil prices following the Iran breakthrough could reduce inflationary pressures in coming months.
The Federal Open Market Committee's decision will be announced on Wednesday afternoon in the US (early Thursday in India). Markets had previously assigned a 97 percent probability to rates remaining unchanged, although expectations could shift following the latest developments.
The biggest talking point on Wall Street was the spectacular debut of SpaceX. The aerospace and AI company's IPO raised $75 billion at $135 per share. The stock surged to as high as $176.52 during its first trading session before ending at $160.95.
The listing gave SpaceX a market valuation of about $2.1 trillion and reportedly pushed its founder, Elon Musk, past the $1 trillion personal wealth mark, making him the world's first trillionaire.
The successful debut is also fuelling expectations that leading AI companies such as Anthropic and OpenAI could pursue public listings in the future.
US stocks closed higher on Friday amid optimism over both the SpaceX listing and prospects for an Iran agreement.
Dow Jones rose 353.51 points (0.70 percent) to 51,202.26.
S&P 500 gained 37.16 points (0.50 percent) to 7,431.46.
Nasdaq Composite advanced 79.18 points (0.31 percent) to 25,888.84.
The Iran agreement announcement triggered another rally in US futures.
Dow futures rose 401 points (0.78 percent).
S&P 500 futures gained 1.05 percent.
Nasdaq futures jumped 1.75 percent.
European markets gained nearly 2 percent on Friday as lower fuel prices and hopes of peace boosted sentiment.
Asian markets opened strongly:
Japan's Nikkei surged 5.5 percent.
South Korea's Kospi jumped 6.2 percent.
Australia's benchmark index rose 1.35 percent.
Hong Kong advanced 1.25 percent.
Shanghai gained around 1 percent.
Indian equities posted one of their strongest sessions of the year on Friday, supported by lower crude prices and improving geopolitical conditions.
Sensex jumped 1,695.40 points (2.30 percent) to 75,527.95.
Nifty 50 gained 461.30 points (1.99 percent) to 23,622.90.
Bank Nifty rose 2.97 percent to 56,814.80.
Mid cap 100 climbed 2.43 percent.
Small cap 100 advanced 2.80 percent.
Market breadth remained strongly positive, with gainers outnumbering losers by nearly three to one.
Among Kerala-linked banking stocks:
Federal Bank touched a record ₹318.35 before closing at ₹315, up 1.69 percent.
South Indian Bank hit a record ₹47.50 and ended 2.82 percent higher at ₹46.60.
CSB Bank gained 2.87 percent.
Dhanlaxmi Bank rose 3.71 percent.
Gold finance stocks also rallied as bullion prices strengthened:
Muthoot Finance rose 5.40 percent.
Manappuram Finance gained 4.43 percent.
Foreign portfolio investors remained net sellers on Friday, offloading shares worth ₹1,082.18 crore in the cash market.
Domestic institutions absorbed the selling pressure, recording net purchases of ₹5,341.29 crore.
Foreign investors have sold ₹62,853 crore worth of Indian equities so far in June, taking total outflows for 2026 to ₹2.87 lakh-crore.
Shares of Rajesh Exports hit the lower circuit for a seventh consecutive session amid an accounting controversy. The stock has lost 57 percent this year.
Expectations of progress in the IPO process of National Stock Exchange of India lifted IFCI shares by 20 percent.
Vedanta Limited completed its four-way demerger, creating separate listed entities focused on aluminium, oil and gas, power, and iron and steel businesses.
Gold prices moved higher again amid uncertainty over the timing of the peace agreement.
Spot gold, which closed at $4,220.30 an ounce on Friday, climbed above $4,320 in early trading before easing slightly.
In Kerala, 22-carat gold has risen by ₹2,520 per sovereign over the past two days to ₹1,09,320. Dealers expect further gains if global prices remain firm.
Silver rose above $70 an ounce, while platinum, palladium and rhodium also remained elevated.
Oil prices continued to retreat as traders priced in the possibility of a lasting settlement in West Asia.
Brent crude fell 3.4 percent on Friday to $87.33 a barrel.
It dropped further to around $83.77 in early trade.
WTI crude eased towards $80.76 a barrel.
Lower oil prices are expected to benefit India by reducing import costs, easing inflation and supporting the rupee.
Sensex: 75,527.95 (+2.30%)
Nifty 50: 23,622.90 (+1.99%)
Bank Nifty: 56,814.80 (+2.97%)
Mid cap 100: 60,768.10 (+2.43%)
Small cap 100: 18,197.45 (+2.80%)
Dow Jones: 51,202.26 (+0.70%)
S&P 500: 7,431.46 (+0.50%)
Nasdaq: 25,888.84 (+0.31%)
Dollar/₹: ₹95.11 (-₹0.65)
Gold (ounce): $4,220.30 (+$7.60)
Gold (sovereign): ₹1,09,320
Brent crude: $87.33 (-$3.05)