Equity benchmarks staged a sharp recovery in early trade on Friday, as the Sensex opened 877 points and Nifty 50 over 250 points higher and continued gaining momentum, tracking strong gains across Asian markets and a rebound on Wall Street.

Investor sentiment improved after US President Donald Trump cancelled plans to strike Iran, citing progress in talks, while Brent crude oil slipped below $90 a barrel, easing inflation concerns and boosting prospects for oil-sensitive sectors.

The rupee strengthened by 60 paise to ₹95.25 against the dollar in early trade.

According to Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments, lower crude prices could help India manage its balance of payments pressures, support mild appreciation in the rupee, and trigger short-covering by foreign institutional investors, who currently hold significant short positions.

“Since FIIs are hugely short in the market, there will be short-covering, triggering a rally. Bank Nifty has the potential to outperform,” he said.

However, Vijayakumar cautioned that foreign investors may turn sellers on rallies later, as the artificial intelligence-driven investment theme has regained momentum in markets such as South Korea and Taiwan.

Sensex rallied over 1,020 points, and Nifty 50 zoomed 294 points in today’s early session from its previous close.

At around 9.41 am, the Sensex was up 872.78 points or 1.18 per cent at 74,705.33, after climbing to an intraday high of 74,859.16. The Nifty 50 advanced 225.30 points or 0.97 per cent to 23,386.90, having touched a day’s high of 23,455.95 in early trade.

Broader markets outperformed, with both midcap and smallcap indices rising over 1.5 per cent each.

Oil-sensitive sectors outlook positive

The decline in crude prices would likely improve the outlook for sectors such as aviation, automobiles, paints, chemicals and oil marketing companies, where lower input costs can support margins, according to market experts.

On Friday, sectoral indices traded firmly in positive territory, led by realty, financials and auto stocks. IT, pharma and healthcare posted relatively modest gains of less than 0.5 per cent. The IT sector has been witnessing significant pressure in the recent trading sessions.

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L&T, Shriram Finance, IndiGo lead Nifty 50 gainers

Among the Nifty 50 constituents, L&T, Shriram Finance, IndiGo, Eternal, TMPV and Trent emerged as the top gainers, while ONGC, Hindalco, Tech Mahindra and Coal India traded lower.

The market breadth remained firmly positive. Of the 3,106 stocks traded on the BSE, 2,557 advanced, 409 declined and 140 remained unchanged. As many as 42 stocks touched their 52-week highs, while 30 hit 52-week lows. Additionally, 69 stocks were locked in the upper circuit and 47 in the lower circuit.

Midcap and smallcap movers

Under the midcap segment, Tata Investment, Motilal OFS, Ashok Leyland and HPCL gained 4-6 per cent, while Oil India, Coforge and Lenskart declined. In the smallcap space, Netweb Tech, JBM Auto, IFCI and IIFL advanced 5-7 per cent, whereas HSCL, RBL Bank and Affle slipped.

On the BSE, MTAR Tech, Netweb and Equitas SFB rallied 6-10 per cent, while Oil India, ONGC, ICICI Lombard General Insurance Company and Balrampur Chini Mills fell up to 2 per cent.

“While a formal agreement is still pending, market participants will closely watch whether the easing geopolitical backdrop can trigger a meaningful turnaround in foreign portfolio flows. Persistent FPI selling over recent months has remained one of the key factors capping a sustained recovery in Indian equities,” said Ponmudi R, CEO of Enrich Money.

“Overall, the near-term market narrative has shifted from geopolitical anxiety to risk-on optimism. If global markets maintain their current momentum and crude oil continues to cool, Indian equities could witness a meaningful improvement in sentiment, with domestic cyclicals and consumption-linked sectors likely to lead the recovery,” said Hariprasad K, founder of Livelong Wealth.

The positive mood was supported by a strong overnight rally in US markets, where the Dow Jones, S&P 500 and Nasdaq gained 1.9 per cent, 1.8 per cent and 2.5 per cent, respectively. Brent crude futures also slipped to a near two-month low of $89 a barrel after Trump said the United States and Iran could sign a peace deal as soon as this weekend that would reopen the Strait of Hormuz to shipping, although Iran said it had not reached a final decision on an agreement. Enthusiasm over SpaceX’s IPO debut improved the sentiment further.

On Thursday, Sensex fell 150.63 points or 0.20 per cent to close at 73,832.55, and Nifty 50 ended 53.35 points or 0.23 per cent lower at 23,161.60. IT and defence stocks witnessed significant pressure.

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Published on June 12, 2026