More Stories

[I] India Stocks Outlook: May rise more Fri amid signs of easing W Asia tensions

 

Informist, Thursday, Jul. 2, 2026

 

By Arya S. Biju

 

MUMBAI – Benchmark equity indices are expected to extend gains for the third straight session Friday amid signs of easing West Asia tensions and continued fall in crude oil prices. However, a sharp rally is not expected as investors await further clarity on the US-Iran negotiations and the progress in the southwest monsoon, which has been sharply below normal so far, analysts said. 

 

Crude oil prices, hovering around $70–$71 per barrel, are expected to further strengthen India's macroeconomic fundamentals and help in achieving higher growth while keeping inflation in check. With this, the expectation of interest rate hikes by the Reserve Bank of India is off the table, analysts said. Even in the case of a deficient monsoon, analysts are not expecting a rate hike by the central bank. Further, dovish remarks from US Federal Reserve Chairman Kevin Warsh, reinforcing expectations of moderating inflation amid lower crude prices, are seen as supporting near-term positive momentum. 

 

Thursday, crude oil prices fell to their lowest level since the start of the US-Iran war amid progress in peace negotiations and continued traffic through the Strait of Hormuz. The US and Iran concluded a round of indirect technical talks at Doha Wednesday, following days of tit-for-tat military attacks amid a dispute over shipping routes in the Strait of Hormuz. While neither side commented on whether they had managed to bridge any of their differences during the talks, Iran's Deputy Foreign Minister Kazem Gharibabadi said that the meeting addressed the US's "violations of its obligations" under the interim peace deal and release of $6 billion frozen Iranian funds, Al Jazeera reported. Both sides also decided to establish a communication channel to resolve disputes.

 

In the latest development, the US and Iran agreed to continue discussions over the coming period, with the next meeting to be scheduled as soon as possible after the conclusion of the funeral processions for the former Iranian Supreme Leader Ayatollah Ali Khamenei, who was killed in the US-Israeli strike on the first day of the war. The six-day funeral processions are set to begin on Saturday in Iran and Iraq, AlJazeera reported. 

 

In the domestic market, with retail investors pumping in significant cash, small- and mid-cap stocks are expected to continue outperforming the benchmark indices in the near term, G Chokkalingam, founder and head of research at Equinomics Research, said. "What is happening, the retail investors are pouring into the market, they are lapping up small caps, and that is why FIIs are not selling because their penetration is not there," he said. 

 

Buying activity by domestic investors picked up sharply in June, with retail investors buying domestic equities worth around INR 141 billion, compared with INR 30.2 billion in May, Moneycontrol reported, citing NSE data. During Apr-Jun, retail investors brought shares worth around INR 353 billion, their biggest quarterly purchase since the December quarter of 2024, the report said. 

 

Thursday, the Nifty 50 index settled at 24175.70, up 169.85 points or 0.7%. The BSE Sensex closed at 77502.12, up 579.48 points or 0.8%. In the broader market, small-cap indices rose 1.0–1.3%, outperforming both their mid-cap and benchmark peers. Going ahead, the 50-stock index is seen finding immediate support at 24070-24050 points, Sudeep Shah, head of technical and derivatives research at SBI Securities, said in a note. Meanwhile, the 24270-24300 points zone is likely to act as an immediate hurdle for the index. A decisive move above the 24300 mark could trigger fresh buying interest, paving the way for a sharp upside rally towards the 24450 level, he said.  End

 

US$1 = INR 95.39

 

Edited by Saji George Titus

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.