Indian shares set to extend gains on US-Iran peace deal
- GIFT Nifty futures were trading at 23,939 as of 7:50 a.m. IST, indicating that the benchmark Nifty 50 would open above Monday's close of 23,853.90
India’ stock benchmarks are set to extend gains at the open on Tuesday after rising about 3% in the last two sessions, boosted by a preliminary peace deal between Iran and the U.S., which triggered a sharp drop in crude prices.
GIFT Nifty futures were trading at 23,939 as of 7:50 a.m. IST, indicating that the benchmark Nifty 50 would open above Monday’s close of 23,853.90.
Other Asian markets traded flat, while Wall Street equities closed higher overnight.
Brent crude futures hovered at around $83 a barrel after rebounding slightly on caution over the lack of details in the preliminary agreement and uncertainty over how quickly supply through the Strait of Hormuz would resume.
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 peace agreement is a major step towards regional stability and reducing concerns over energy supply disruptions, supporting the markets and strengthening the ongoing recovery, said R Ponmudi, CEO of Enrich Money.
Since the war began in late February, the Nifty 50 has fallen 5.3%, pressured by higher oil prices and record foreign outflows. Investors have also shifted money from India to Taiwan and South Korea, citing limited exposure to AI stocks that have led a global rally this year.
However, recent measures by the Reserve Bank of India to stabilise the rupee and attract foreign capital have helped improve sentiment.
Foreign portfolio investors turned net buyers of Indian equities on Monday after 13 consecutive sessions of selling, with inflows of 2 billion rupees ($21.12 million). Domestic institutional investors also bought shares worth 31.89 billion rupees, according to NSE provisional data.
“While the magnitude of FPI buying remains modest, the shift from persistent selling to net buying could signal a moderation of foreign outflow pressure and provide additional support to market sentiment,” said Ponmudi.