The Nifty Bank index rose more than 1 percent in early trade on June 12, outperforming the benchmark Nifty 50 as buying interest returned across the banking sector. All 14 constituents of the banking index traded in positive territory, reflecting broad-based strength in both private and public sector lenders.

Large-cap banking stocks led the rally, with HDFC Bank, ICICI Bank, and State Bank of India among the key contributors to the index's gains. Other major lenders, including Axis Bank and Kotak Mahindra Bank, also traded higher, supporting the upward momentum in the sector.

The rally in banking stocks was driven by a sharp improvement in global market sentiment. Investor risk appetite strengthened on expectations of a potential peace agreement in the Middle East, which boosted global equities and pushed crude oil prices to their lowest levels in nearly two months. Lower oil prices are generally viewed as positive for India's macroeconomic outlook, supporting market sentiment toward financial stocks.

The banking index's strong performance helped it outperform the broader market and highlighted renewed investor confidence in the financial sector. Market participants continued to monitor global developments, interest rate expectations, and domestic economic indicators for further direction.