India’s equity market advanced for the third straight session on Tuesday as easing geopolitical tensions and declining crude oil prices after the US-Iran peace deal boosted investor sentiment and triggered a global rally.
The BSE Sensex has gained nearly 3,000 points in the past three sessions, while the NSE counterpart Nifty50 is up nearly 830 points.
The rally, which is also seen across the midcap and smallcap pockets, has lifted investors’ wealth by nearly 20 lakh crore as the market capitalisation of all BSE-listed firms has grown from Rs 451.83 lakh crore to 471.68 lakh crore.
With crude oil prices falling another 3% to $80-81 per barrel, the Nifty 50 gained 135.25 points or 0.57% to settle at 23,989 on Tuesday, while the Sensex advanced 544.15 points or 0.71% to close at 76,808. However, despite the rally, the benchmark indices remain down 8-10% so far in 2026, underscoring weakness caused by persistent FII selling and external headwinds.
Meanwhile, the rupee also extended its gains for a third consecutive session, strengthening by around 0.15%, or 11 paise, to trade near 94.55 against the U.S. dollar, supported by continued optimism over the ongoing US-Iran peace negotiations.
Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said that market sentiment improved further after positive statements from Iranian officials, while participants now await the next round of discussions scheduled for 19 June, which could prove crucial in determining the longer-term outlook for energy markets and global risk sentiment.
Vinod Nair, Head of Research, Geojit Investments, said that domestic equity markets continued their recovery momentum, buoyed by growing optimism around a de-escalation in US–Iran tensions and softening crude oil prices. Nair added that investor sentiment remains measured ahead of the upcoming US Fed policy meeting, the first under the newly appointed Chair.
“While the benchmark interest rate is widely anticipated to hold steady, market participants will pay close attention to the forward guidance and commentary on the trajectory of monetary policy,” stated Nair.
India's equity market and the rupee generally strengthen when crude oil prices fall because the country imports around 89% of its oil needs.
Lower oil prices reduce the import bill, ease inflation, improve the current account balance and support the rupee by lowering demand for U.S. dollars. It also boosts corporate profitability and improves overall investor sentiment toward the Indian economy.
Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services said that Indian equities are expected to maintain their gradual positive momentum, supported by improving geopolitical developments, a revival in foreign institutional participation and a further fall in crude oil prices.
Foreign Institutional Investors (FII) reversed their recent selling trend and turned net buyers, with net equity purchases of nearly Rs 200 crore on Monday and Rs 384 crore on Tuesday.
“Progress towards a potential US-Iran peace agreement, reportedly scheduled for signing in Switzerland on Friday, along with expectations of the full reopening of the Strait of Hormuz, has significantly improved global sentiment,” stated Khemka.
