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Informist, Monday, Jun. 15, 2026

 

By Arya S. Biju

 

MUMBAI – Domestic equity market may continue its upward momentum in the near-term as improving global risk sentiment and a sharp correction in crude oil prices after the US and Iran reached an agreement to end the near-four-month-long war boosted investor confidence. However, some analysts expect volatility in the market to continue until clarity arises on the implementation of the peace deal and amid concerns over counteractions by Israel. Market participants now await the formal signing of the US-Iran agreement and the US Federal Reserve's policy decision and remarks, due later this week.

 

Monday, the Nifty 50 index closed at 23853.90, up 231 points, or 1%, from the previous close. The BSE Sensex ended at 76264.33, up 736.38 points, or 1%, after hitting a one-month high of 76821.07 intraday. Equity markets across the globe rallied Monday following the announcement of the peace deal to end the West Asia war and reopen the Strait of Hormuz, which is likely to be signed on Friday. The closing of the critical waterway has roiled global energy markets for nearly four months now. Following the deal announcement, the August futures contract of Brent Crude oil on the Intercontinental Exchange plunged 5.5% to an intraday low of $82.52 per barrel.

 

While the peace deal announcement reduces the risk premium on crude prices, physical energy flows will not normalise as quickly as crude futures, Harshal Dasani, business head at INVasset PMS said. "Oil prices can adjust in one trading session; tankers, insurers, port authorities, naval escorts, and refiners move slower," he said. "...the paper market may discount peace immediately, but the physical market may take several weeks, and possibly longer, before returning to pre-conflict rhythm." 

 

Even though the sharp fall in crude oil prices amid hopes of signing of US-Iran peace deal and the re-opening of the Strait of Hormuz improves investor sentiment, it does not instantly repair the inflation and earnings damage already absorbed by companies, Dasani said. "For a meaningful macro reset, crude needs to stay lower for several weeks, freight premia need to cool, and the rupee needs to stabilise," he added. While he expects further correction in crude oil prices, a "straight-line collapse" is said to be less likely unless physical energy flows normalise quickly. Meanwhile, logistical bottlenecks, vessel congestion, mine-risk checks, and insurer caution can keep crude prices volatile, he added. 

 

On a similar note, Prashant Vasisht, senior vice-president and co-group head of corporate ratings at ICRA said that beyond the immediate price action, crude prices could take six months to one year to normalise to pre-war levels given that almost 10-11 million barrels per day of production has been shut in West Asia amid the war, besides which some facilities have suffered damages. 

 

On the economy front, the deal reduces downside risk rather than immediately changing the full-year macroeconomic picture, Dasani said. He expects the Reserve Bank of India to wait for a few weeks of stable crude oil prices, currency, and monsoon data before revising its growth estimates. In the latest policy meeting, the apex bank lowered its forecast for gross domestic product growth in 2026-27 (Apr-Mar) to 6.6% from 6.9?rlier and raised its outlook for FY27 headline inflation by 50 basis points to 5.1% as intensified risks from West Asia war-led uncertainties. Going forward, the GDP growth rate and CPI inflation projections for FY27 can be revised in this changed scenario to 6.9% and 4.6% respectively, V.K. Vijayakumar, chief investment strategist at Geojit Investments, said in a note Monday. 

 

On the data front, wholesale prices in India rose at the quickest pace in at least 26 months in May mainly because of high fuel prices, according to the new WPI series released Monday by the commerce ministry. India's WPI inflation rose to 9.68% in May from 8.26% in April, as per the new series, which has 2022-23 (Apr-Mar) as the base year, updated from FY12 in the old series. The rise in WPI inflation was led by fuel and power inflation, which rose to 30.33% in May from 24.89% in April because of the energy price shock caused by the war in West Asia. "The surge (in WPI inflation) underscores India's exposure to external energy price shocks, with global crude markets continuing to be driven by geopolitical tensions. Going forward, the overall impact will largely depend on the trajectory of oil prices amid the evolving geopolitical situation," Shashwat Singh, fundamental analyst at Bajaj Broking said in a note. 

 

Technically, the sharp recovery from the 23100-23050 points support zone has significantly improved the short-term structure for the Nifty 50 index, Dhupesh Dhameja, derivatives research analyst at SAMCO Securities said in a note. For the upcoming session, 23800-23772 points remains a crucial support for the index, he said. On the higher side, a decisive breakout above 24000 points could trigger a fresh short covering and take the index towards 24250–24500 points, Dhameja said.  End

 

US$1 = INR 94.71 

 

Edited by Deepshikha Bhardwaj

 

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