Indian shares set to join global rally on Gulf peace deal, oil slides

Indian shares are set to open higher on Monday, tracking a global rally, while oil prices tumbled after US President Donald Trump and Iran’s deputy foreign minister said an initial deal had been ​reached to end the war and resume traffic through the Strait of ‌Hormuz.

The countries will sign a memorandum of understanding in Switzerland on Friday, said Pakistani Prime Minister Shehbaz Sharif, whose country served as a mediator in the negotiations.

GIFT Nifty futures were trading at 23,983.5 as ​of 7:38 a.m. IST, indicating that the benchmark Nifty 50 would open ​about 1.5% above Friday’s close of 23,622.90.

The Nifty 50 and BSE Sensex ⁠rose about 2% and 2.3% on Friday as optimism of a diplomatic breakthrough in ​the four-month long U.S.-Iran war boosted risk appetite.

Other Asian markets jumped 2.4%, while Brent crude dropped 4.1% ​to $84 a barrel, the lowest since March.

Lower oil prices are a positive for India, the world’s third-largest oil importer, as they help ease pressure on inflation, the rupee and the country’s trade ​deficit.

“The diplomatic resolution in the Middle East reduces geopolitical risk, and the resulting crude ​oil price decline is especially beneficial to India, as it eases inflationary pressures and improves the ‌macroeconomic ⁠outlook,” said Pravesh Gour, senior technical analyst at Swastika Investmart.

Foreign portfolio investors offloaded Indian stocks worth 10.82 billion rupees ($113.77 million) on Friday, while domestic institutional investors bought shares worth 53.41 billion rupees, according to NSE’s provisional data.

For the year, FPIs have offloaded a record $30.7 ​billion, pressured by ​the Iran war and limited ⁠exposure to the global AI-led rally. Analysts said a resolution of the Middle East conflict could help revive foreign outflows.

Both the Nifty and ​Sensex have lost 6.2% and 7.1% since the start of ​the Iran ⁠war in late February.