Stock Market Today: Bombs Fly, But Bulls Don’t Cry! Why NSE, BSE Zooming Despite Iran-Israel Conflict — What Should Investors Do?

Stock Market Today: Despite the escalating geopolitical conflict between Israel and Iran, Indian stock markets surged on Friday, showing remarkable resilience and strength. As of 12:46 PM on June 20, 2025, the BSE Sensex was up 726.24 points (0.89%) at 82,088.11, while the Nifty 50 climbed 217.90 points (0.88%) to 25,011.15.

This rise came even as tensions in the Middle East heightened, with Israel reportedly bombing nuclear targets in Iran and Iran responding with missile and drone attacks.

What’s Driving the Rally?

RBI’s New Project Finance Norms

The Reserve Bank of India (RBI) unveiled final guidelines for project financing, which have been well received by the market. These norms reduce provisioning requirements for under-construction projects, especially in infrastructure and real estate. This has triggered a rally in NBFC stocks like PFC, REC, IREDA, and IRFC.

Fed Signals Two Rate Cuts in 2025

The US Federal Reserve kept interest rates unchanged and signalled two rate cuts in 2025. This suggests a more supportive monetary environment for global markets. Despite expectations of slower GDP growth and rising inflation in the US, investors found comfort in the central bank’s signal of future easing.

Weaker Dollar Boosts Emerging Markets

The US Dollar Index weakened to 98.57, extending a 0.34% drop. A weaker dollar usually supports emerging markets like India by encouraging foreign capital inflows and strengthening local currencies like the rupee.

Foreign Investor Buying Remains Strong

Foreign Institutional Investors (FIIs) continued their strong buying streak in Indian markets, infusing Rs 1,008.43 crore on June 19, 2025, as per NSE data. They purchased equities worth Rs 11,965.59 crore and sold Rs 10,957.16 crore, marking a significant net inflow.

Meanwhile, Domestic Institutional Investors (DIIs) remained active as well, recording a net buy of Rs 365.68 crore, with total buys at Rs 10,710.38 crore and sales worth Rs 10,344.70 crore.

Asian Markets Gain as War Fears Cool

Asian markets traded higher on Friday as fears of an imminent U.S. military strike on Iran eased, offering some relief to global investors. The MSCI Asia-Pacific Index (excluding Japan) rose 0.7%, boosted by a 1.2% jump in Hong Kong’s Hang Seng.

South Korea’s KOSPI rallied 1.1%, crossing the 3,000 mark for the first time since early 2022, supported by optimism around newly elected President Lee Jae Myung’s stimulus plan.

However, Japan’s Nikkei remained flat, while China’s central bank held its benchmark lending rates steady, as widely expected. On the economic front, Japan's core inflation touched a two-year high in May, fueling speculation that the Bank of Japan may consider a rate hike later this year.

Despite these developments, analysts believe the BOJ is unlikely to act before December.

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Decline in Crude Oil Price

The decline in Brent crude prices, down 2.1% to $77.23 per barrel, further lifted sentiment across the region. Lower oil prices are seen as positive for import-heavy Asian economies, including India, and help curb inflationary pressures.

Market Breadth and Sector Performance

Out of 2,747 stocks traded on the NSE, 1,812 advanced, while 863 declined and 72 remained unchanged. Sectorally, Nifty PSU Bank gained the most at +1.49%, followed by Realty, Financial Services, and Banking. The only sector in the red was media, down just 0.01%.

Top Gainers on Sensex

Major contributors to today’s rally included Bharti Airtel (+2.42%), M&M (+2.37%), and Nestle India (+2.07%). Other big names like ICICI Bank, SBI, Reliance, and HDFC Bank also saw gains above 1%.

What Experts Are Saying

Market analyst Khushi Mistry explained the rally but warned against overexuberance, “This is not a time for blind buying. Investors should focus on domestic industries and sectors with strong fundamentals. Defence and banking look promising due to stable earnings and government support.”

She sees stocks like HAL, BEL, and BHEL in defence as top picks, backed by a strong order book and rising government capex. In banking, HDFC Bank and ICICI Bank stand out for their solid financials and consistent performance.

However, she cautions about the risks, “My biggest concern is a shift of investor interest toward safer assets like gold and debt if the war escalates. Equity markets could face outflows in the short term.”

Khushi also warned that oil marketing companies like IOC, HPCL, and BPCL may face margin pressure due to fluctuating crude prices, while ONGC might benefit as a producer.

Even diversified companies like Reliance Industries could see mixed outcomes, “While its energy vertical may benefit, the retail and FMCG arms could feel the pinch of rising inflation.”

Logistics and port companies might also experience delays and cost overruns due to global supply chain disruptions, she added.