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Informist, Wednesday, May 6, 2026

By Arundathi A R

MUMBAI – Analysts expect headline equity indices to extend gains Thursday on hopes the US and Iran will inch closer to an agreement to end the war. The fall in crude oil prices to below $100 per barrel, a first after 10 straight sessions, emerged as a new factor that could provide a positive bias to the equity market. The sharp rise of the rupee against the dollar, which snapped a five-day losing streak, is also expected to improve market sentiment. The March quarter results, crude oil prices, and the rupee level will be key factors that will decide the market direction, dealers said. Brent crude prices fell below $100 a barrel just a few minutes before Indian equity market trading ended.

"The White House believes it's getting close to an agreement with Iran on a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations," US news website Axios reported, quoting US officials. Washington expects Iran to respond on several key points in the next 48 hours, the report said. Nothing has been agreed yet, but is was the closest the parties have come to an agreement since the West Asia war began, the website reported citing unnamed sources. If formalised, the MoU would declare an end to the US-Iran war and start 30 days of negotiations for a detailed deal between the warring countries.

"Even though the crude oil prices fell below $100 a barrel, it is negative for India on a perspective that the levels are still 50–60% higher from the once normal levels," Asuthosh Mishra, analyst and head of research at Ashika Stock Broking said. He expects crude oil prices below $70 per barrel will be beneficial for India. At 1655 IST, Brent crude July futures were down 11% at $97.85 a barrel.

"We will still wait for a decisive close or sustenance above 24350 spot levels that could lead it towards 24600 spot levels in near term," Vipin Kumaar, assistant vice president of equity research at Globe Capital Market, said. Wednesday, the Nifty 50 settled at 24330.95, up 1.2% or 298.15 points. The BSE Sensex closed at 77958.52, up 1.2% or 940.73 points.

The Indian currency settled at 94.61 a dollar Wednesday and posted its biggest gain in a day in almost five weeks. "Positive FII flow data from the previous session also aided sentiment, with expectations that foreign selling may reduce or turn into fresh buying if stability continues," Jateen Trivedi, commodity and currency research analyst at LKP Securities said in a note. He expects a softer crude oil outlook and improved capital market sentiment to support the rupee.

Foreign institutional investors were net sellers Tuesday after being net buyers Monday. They sold shares worth INR 36.22 billion Tuesday. Domestic institutional investors continued with their buying and bought shares of INR 26.03 billion Tuesday.

Valuations of the Indian equity market are in the fair zone, Kotak Institutional Equities said in a report. "However, the recent rally in stock prices across select consumption and investment stocks has resulted in valuations turning ‘rich' in these segments, while those of outsourcing and financials are in the inexpensive-to-fair zone currently," the report said. The brokerage expects India's macroeconomic outlook to be weak in the absence of a resolution to the West Asian conflict.  End

US$1 = INR 95.28 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Pankaj Aher

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