⚫ US-Iran Peace Deal: The Complete Story Behind the Rise in Indian Stock Market
Hello friends! Today we'll discuss the meteoric rise in the Indian stock market, which has surprised all investors. On Monday, the Sensex jumped 1,137 points, and the Nifty surpassed 23,958. The primary reason behind this historic surge is the potential peace agreement between the United States and Iran. Let's explore this issue in detail.
⚫ Peace Agreement: What is the whole matter?
The US and Iran are set to sign a crucial Memorandum of Understanding (MoU) in Switzerland on June 19. According to the leaked 14-point memorandum, the agreement includes several key points:
Key points of the agreement:
👉 Iran to freeze its nuclear program at current levels for 60 days
👉 The US will not impose any new sanctions or increase its military presence in the region.
👉 Iran reaffirms it will never develop nuclear weapons
👉 The naval blockade on the Strait of Hormuz will be lifted immediately and shipping will be restored within 30 days
👉 Iran's frozen assets worth about $24 billion will be released in four installments.
👉 US to issue waiver to lift sanctions on Iran's oil exports
⚫ What impact did it have on the stock market?
👉 News of this agreement sparked a surge in the Indian stock market. Let's understand this statistically:
⚫ Market Performance:
👉 Sensex rises 1137.12 points to 76,665.07
👉Nifty rose 335.80 points to 23,958.70.
👉 Sensex gains over 3200 points in four trading sessions
⚫ Market Capitalization:
👉 The total market capitalization of the Indian stock market again crossed $5 trillion.
👉 Market cap increased by more than 6% in just four sessions
⚫ Fall in crude oil prices: The biggest relief
👉 The biggest benefit of this agreement was seen in the form of falling crude oil prices:
👉 Brent crude fell 4.6% to $83 a barrel.
👉 Oil prices plunge more than 16% in five sessions
👉 The opening of the Strait of Hormuz averted the threat to 20% of the world's oil supply.
⚫ Why does the Indian economy benefit?
India is the third largest oil importing country in the world, hence falling oil prices are no less than a boon for us.
⚫ Macroeconomic benefits
👉 Inflation will ease as oil prices impact input costs
👉 The current account deficit will reduce
👉 Rupee to strengthen - Rupee opens 43 paise stronger
👉 GDP growth rate may reach 6.9%
⚫ Benefit to corporate sector:
👉 Costs will come down in sectors like paint, plastic, tyres
👉 Direct benefit to oil marketing companies, airlines, auto sector
👉 Expected 12-15% growth in corporate earnings
⚫ withdrawal of foreign investors
Foreign investors who had been withdrawing money from the Indian market for a long time are now returning:
👉 FIIS makes net purchases for the first time in 11 seasons
👉 On June 16, Flls made purchases worth ₹1004 crore
👉 Made further purchases worth ₹2838 crore on June 17
👉 Till now in 2026, FIls had withdrawn ₹2.67 lakh crore
👉 Opinion of market experts
⚫ Positive attitude:
👉 The biggest macro challenge is over with the oil crash, says VK Vijayakumar of Geojit Investments
👉 Kotak Institutional Equities believes that there may be mild rerating in the market.
👉 According to Rohit Aggarwal of Ro Fund Management, lower oil prices are beneficial for corporate India.
⚫ Advice to be cautious:
👉 Some experts are considering this as a temporary relief rally.
👉 Sunny Agarwal of SBI Securities says FIIs are 92% short, which is likely to lead to short covering.
👉 Kartik Kumar of Bandon AMC warns that if the deal fails, the market could revert to the previous state.
⚫ the way forward
👉 Although the market is bullish, it is important to pay attention to some things.
⚫ Risk Factors:
👉 It is not yet clear what the final form of the agreement will be.
👉 US Vice President JD Vance described the memorandum as a "very general document".
👉 Midcap and smallcap stocks have already seen a sharp rise
👉 Valuations are still at elevated levels
⚫ Potential positive aspects:
👉 If oil prices remain low, companies' earnings will increase.
👉 FCNR(B) swap window may boost NRI investments
👉 RBI's steps will boost foreign investment
conclusion
The US-Iran peace deal has brought significant relief to the Indian market. Falling crude oil prices, a strengthening rupee, and the return of foreign investors have revitalized the market. However, market experts are cautious about this surge and believe the real test will come in the coming days when the agreement is finalized and corporate results are released.
Investors are advised not to get carried away by this surge and instead manage their investments prudently. Market volatility will persist, but the Indian market's prospects remain strong from a long-term perspective.
Disclaimer: This article is for informational purposes only and
This is not investment advice. Please consult your financial advisor before making any investment decisions.
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