Updates for morning trade

By Bharath Rajeswaran

June 12 (Reuters) - Indian shares advanced on Friday, tracking gains in other Asian markets, as oil prices fell after U.S. President Donald Trump cancelled plans to strike Iran, citing progress in talks.

The benchmark Nifty 50 .NSEI rose 1.02% to 23,398.9, while the BSE Sensex .BSESN climbed 1.17% to 74,693.12 by 9:35 a.m. IST.

Other Asian stock markets .MIAPJ0000PUS jumped 3.8%. Brent crude futures LCOC1 slipped to near two-month lows, tempering inflation fears.

Trump said on Thursday the United States and Iran could sign a peace deal as soon as this weekend that would reopen the Strait of Hormuz to shipping. However, Iran said it had not reached a final decision on an agreement.

"Trump's decision to call off planned military strikes on Iran signals a diplomatic breakthrough, significantly reducing geopolitical risk premiums that had been weighing on global equities and energy markets over the past week," said Hariprasad K, analyst and founder of Livelong Wealth.

All 16 major sectors logged gains. The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 rose 1.6% and 1.4%, respectively.

Oil marketing companies BPCL BPCL.NS, HPCL HPCL.NS and Indian Oil IOC.NS rose 2.4% to 3.8%, while airline IndiGo INGL.NS gained 3.5%, aided by the drop in oil prices.

Paint, tyre and cement makers, which also benefit from lower crude prices, advanced as well.

Infrastructure major Larsen & Toubro LART.NS, which has a significant exposure to the Middle East, climbed 2.8%.

Heavyweight banks .NSEBANK and financials .NIFTYFIN rose 1.4% each, heading for their third gain in four sessions, after the Reserve Bank of India detailed a concessional forex swap facility for banks' overseas foreign-currency borrowings.

"As banks swap dollar deposits with the RBI, this should improve their rupee liquidity positions over the next four months, reducing their reliance on the higher cost of deposit, allowing them to increase lending," Nomura analysts said in a note.