On a Thursday morning in May, the Indian market's early signal of a firmer open rests on a fragile hope: that the long standoff between the United States and Iran may be moving toward a settlement. Crude oil, which has been pressing on economies from New Delhi to Seoul, eased as talks were described as nearing their final stages, and global shares climbed in response. Yet the calm is provisional, carried on the sea lanes of the Strait of Hormuz and on the narrow footing of a rupee that has just touched a record low.
GIFT Nifty Rises 138 Points as Easing Oil Prices and US-Iran Talk Hopes Point to Firm Sensex, Nifty Open
Cheaper crude, but Brent still sits above $105 a barrel
Mark
Why is a 138-point move in GIFT Nifty getting this much attention?
Mimi
It's the early read on how Indian stocks will open. Here it lines up with oil falling, Wall Street rebounding and Asia recovering.
Mark
And oil is the thread through all of it?
Mimi
Largely. Crude dropped over 5.6 percent after Trump said talks with Iran were in final stages, and three supertankers reportedly crossed Hormuz.
Luke
Careful, though. That's Trump's description of the talks, and he also threatened more attacks if there's no deal. Nothing is confirmed as settled.
Mark
Why does India feel oil so directly?
Mimi
The rupee hit a record low of 96.96 on Wednesday amid high oil prices. Cheaper crude eases import stress and, per Ponmudi, inflation and margins.
Luke
That's one analyst's view of the benefits, not a measured outcome. And Brent is still around $105.83.
Mark
Are investors all in?
Mimi
Not quite. Foreign investors sold Rs 1,597 crore on Wednesday, while domestic investors bought Rs 1,968 crore.
Luke
Also, GIFT Nifty is an indication, not the open itself. The Nifty's 23,800 hurdle is right where it's trading, so how the open actually plays out is unknown.
El Pulso
- Oil prices slid more than five percent in a single session as Washington declared Iran talks were in their final stages, while threatening renewed strikes if Tehran refused a deal.
- GIFT Nifty climbed to 23,803, reaching for the 23,800 hurdle that analysts have marked as the next test for Indian equities.
- The rupee plunged to a record low of 96.96 against the dollar, squeezed by expensive imported crude and steady foreign investor selling.
- Supertankers threading the Strait of Hormuz offer the first visible proof that shipping may be resuming, but the peace has yet to be signed.
- Traders are watching whether the negotiations hold and whether the oil flow normalizes, since either failure could quickly reverse the morning's gains.
On a Thursday morning in May, the Indian market's early signal of a firmer open rests on a fragile hope: that the long standoff between the United States and Iran may be moving toward a settlement. Crude oil, which has been pressing on economies from New Delhi to Seoul, eased as talks were described as nearing their final stages, and global shares climbed in response. Yet the calm is provisional, carried on the sea lanes of the Strait of Hormuz and on the narrow footing of a rupee that has just touched a record low.
GIFT Nifty was trading at 23,803 in early Thursday trade, up 138 points, a level that suggested Indian benchmarks would open firmly. The lift came from cooling crude, a rebound in global equities, and hopes for a peace deal between the United States and Iran.
The mood had been built the night before. Wall Street recovered from a three-day selloff, led by technology and chip stocks ahead of Nvidia's results, and Asian markets followed, ending a four-day losing streak. In Seoul, the KOSPI surged more than four percent after Samsung workers suspended a planned strike.
Oil sat at the heart of the shift. Three supertankers passed through the Strait of Hormuz, easing fears of a prolonged supply disruption. Brent had dropped sharply after President Trump said talks with Iran were in their final stages, though he also warned of further attacks if no deal was reached. Brent recovered slightly on Thursday, to about $105.83 a barrel.
For India, the stakes are personal. The rupee had hit a record low of 96.96 against the dollar, pressured by costly oil and foreign investors who were still selling. Softer crude could ease inflation and import strain, though analysts warned that uncertainty over the talks, continued foreign selling and rupee weakness could limit any rally. The Nifty's support sits near 23,400, and its next hurdle is 23,800, the same level GIFT Nifty was already testing.
GIFT Nifty was trading at 23,803 in early Thursday trade, up 138 points or 0.58 percent. That level points to a firm opening for India's benchmark Sensex and Nifty, helped by cooling crude prices, a rebound in global equities and hopes for a U.S.-Iran peace deal.
The signal follows a Wednesday session in which Indian markets recovered from deep morning losses to finish slightly higher. The Sensex gained 117.54 points, or 0.16 percent, to close at 75,318.39. The Nifty rose 41 points, or 0.17 percent, to settle at 23,659. Reliance Industries, energy, auto and capital goods stocks led the recovery, and broader markets did better than the benchmarks.
Overnight, Wall Street bounced back from a three-day selloff, with technology and chip stocks leading ahead of Nvidia's quarterly results. The Dow Jones Industrial Average jumped 645.47 points, or 1.31 percent, to 50,009.35. The S&P 500 climbed 1.08 percent to 7,432.97, and the Nasdaq Composite rose 1.55 percent to 26,270.36.
Asia followed on Thursday, ending a four-day losing streak. MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.2 percent. South Korea's KOSPI surged more than 4 percent after Samsung Electronics workers suspended a planned strike and Nvidia reported stronger-than-expected results. Japan's Nikkei gained 1.9 percent and Australian shares added 1.5 percent.
Oil is central to the mood. Reports said three supertankers passed through the Strait of Hormuz on Wednesday, easing fears of prolonged supply disruption as some vessels resumed transit through the key shipping route. Crude had fallen more than 5.6 percent in the previous session after U.S. President Donald Trump said negotiations with Iran were in their final stages, though he also warned of further attacks if Tehran did not agree to a deal. On Thursday it recovered slightly: Brent futures rose 0.77 percent to $105.83 a barrel, and U.S. WTI traded near $99.2.
The drop in crude matters to India in particular because the rupee hit a record low of 96.96 against the dollar on Wednesday, amid elevated oil prices. Institutional flows were mixed that day: foreign institutional investors sold Indian equities worth Rs 1,597 crore, while domestic institutional investors bought a net Rs 1,968 crore.
Ponmudi R, CEO of Enrich Money, said markets should open with a positive undertone. In his view, softer crude could ease inflationary pressure, reduce import-related stress and improve the outlook for corporate margins. He cautioned, however, that uncertainty over the negotiations' final outcome, continued foreign selling and rupee weakness could limit aggressive gains.
On the charts, he described the Nifty as cautiously positive, with 23,400 as key support and 23,800 as the immediate hurdle. That is almost exactly where GIFT Nifty is trading. The Bank Nifty also has a cautiously positive tone, though resistance near 54,300-54,500 could cap its gains. What to watch is whether the Iran talks hold and Hormuz shipping keeps moving.
Citas Notables
Markets should open with a positive undertone on crude's correction and US-Iran optimism, but uncertainty over the outcome, FII selling and rupee weakness could limit aggressive upside.— Ponmudi R, CEO, Enrich Money
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