Financial Stocks Lead Market Rally as US-Iran Peace Hopes Boost Risk Appetite; IT Refuses to Join the Party

Mumbai, June 12: Financial stocks spearheaded Friday’s market rally, with the Nifty Financial Services index surging 3.15% as investors piled into banks and non-banking finance companies amid improving global risk sentiment and easing concerns over inflation. 

The sector emerged as the biggest gainer on Dalal Street after U.S. President Donald Trump called off planned military strikes on Iran, raising hopes of a diplomatic breakthrough and triggering a sharp fall in crude oil prices. Lower oil prices are viewed as positive for India’s macroeconomic outlook as they help contain inflation, reduce pressure on the current account deficit and support economic growth. 

NBFCs and Banks Drive Gains

Financial Services index boomed as lenders and non-bank lenders partied after Trump’s reassuring remarks. Source: NSE  

NBFCs led the charge within the financial space, with Shriram Finance and Bajaj Finance emerging among the top gainers on the Nifty 50. Investors cheered the prospect of a more benign inflation environment, which could support consumer demand and credit growth while improving asset quality across lending businesses. Shriram Finance share price added 7.7% and Bajaj Finance share price rose 5.5%. 

Private sector lenders also witnessed strong buying interest, with HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank contributing significantly to the benchmark indices’ gains. State Bank of India and other public-sector lenders also advanced as risk appetite improved across the market. 

Apart from lower oil prices, sentiment was aided by expectations that easing inflationary pressures could provide greater policy flexibility and support liquidity conditions in the financial system. 

Consumer Durables Shine 

Consumer durables emerged as the second-best performing sector, gaining nearly 2.4%, as investors rotated into discretionary consumption plays. 

Titan Company was among the top performers on the Nifty, while stocks linked to household consumption and discretionary spending attracted fresh buying. Titan Company share price rose 4% while Kalyan Jewellers share price rallied 4.2%. Market participants viewed falling crude prices as supportive for consumer spending, as lower fuel costs can improve household disposable income and reduce inflationary pressures. 

The rally in consumer-facing stocks also reflected growing optimism about domestic demand and economic growth prospects. 

Auto, Realty, Telecom Join the Upmove 

Nifty Auto joined the party as crude crash inspired outlook. Source: NSE 

Auto stocks advanced on expectations of lower input costs and improved consumer sentiment. Realty shares gained as investors returned to rate-sensitive sectors, while telecom counters Vodafone Idea and Bharti Airtel also witnessed strong buying, gaining up to 5%. Infrastructure giant Larsen & Toubro climbed over 4%, benefiting from hopes that easing Middle East tensions could support investment activity across Gulf economies, a key market for the company. 

Oil Beneficiaries Participate 

Although financials and consumer durables stole the spotlight, oil-sensitive sectors also remained in focus. IndiGo parent InterGlobe Aviation gained on expectations of lower aviation fuel costs, while HPCL, BPCL and Indian Oil Corporation rallied as declining crude prices improved the outlook for marketing margins. 

The broad-based nature of the rally was reflected in sectoral performance, with nearly all major indices ending in positive territory. 

IT Defies Sectoral Rally, Ends Flat as TCS, Wipro Limit Losses 

Nifty IT refused to party as AI kept haunting its stocks. Source: NSE 

Information technology was the lone weak spot in an otherwise buoyant market, with the Nifty IT index slipping 0.09% even as all other major sectoral indices ended in positive territory. 

The sector remained under pressure as investors continued to grapple with concerns over global technology spending and the long-term impact of artificial intelligence on traditional IT services business models. Uncertainty around discretionary spending by clients in key markets such as the U.S. and Europe also kept sentiment subdued. 

However, losses were largely contained by gains in heavyweight stocks such as TCS and Wipro. TCS rose after the firm said it has expanded its tie-up with Oracle by launching India’s first Oracle AI Data Platform Lab and Center of Excellence (CoE) in Kolkata. Wipro’s buyback had opened yesterday. 

The gains in TCS and Wipro helped offset weakness in stocks such as Tech Mahindra, which ended among the notable laggards on the Nifty 50. Investors remain cautious on companies with greater exposure to discretionary technology spending, particularly as clients continue to prioritise cost optimisation and AI-driven efficiency projects. 

Source

• NSE