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Informist, Monday, May 25, 2026

 

By Arundathi A R

 

MUMBAI – The domestic equity market is expected to extend its gains in the coming days as the US and Iran inch towards a peace deal to reopen the Strait of Hormuz. Crude oil prices, which fell below $100 a barrel, also provide scope for positive momentum to stay in the market. Foreign investment flows and rupee movement will also be closely watched by market participants to gauge the sentiment.

 

Monday, the Nifty 50 ended 1.3% higher at 24031.70 points, while the BSE Sensex closed 1.4% higher at 76488.96 points.

 

"Nifty looks good, after today's breakout from the recent consolidation," Rupak De, senior technical analyst at LKP Securities, said. De sees the Nifty Bank to support Nifty (50) in the next few days. The Bank Nifty index ended Monday's session 2.3% higher at 55293.65, and was among the biggest sectoral gainers. The Nifty PSU Bank, Nifty Financial Services, and the Nifty Private Bank were also among the top gainers, rising 2.1–2.9%.

 

"Moving forward, we expect the Nifty index to extend the ongoing upward move toward 24200 spot levels," Vipin Kumar, technical and derivatives analyst at Globe Capital Market, said. "A final peace deal (if concluded) between Iran and the US will further strengthen market sentiment, potentially leading the Nifty index toward a sustainable rally up to the 24500–24600 spot levels."

 

"We remain constructive on markets, though the optimism is based on the expectation that ME (Middle East) hostilities will resolve in the coming weeks," Emkay Global Financial Services said in its strategy report. "A continued closure of the Strait of Hormuz beyond 2M (two months) is not priced in and could trigger a market correction if it persists," it said.

 

Meanwhile, Finance Minister Nirmala Sitharaman said India's economic situation remains positive and resilient despite some external challenges stemming from the West Asia crisis. The ongoing West Asia crisis is driving up fuel costs and resulting in delayed cargo and costlier shipping, the minister said. "High international crude prices and very fluctuating ones, high international fertiliser prices, unimaginable increase in fertiliser prices, high gold prices, that is creating some challenges on the external front. All these three payments will have to be in foreign exchange," she said at the foundation day of the Small Industries Development Bank of India in Mumbai.

 

Prolonged supply-chain disruptions are likely to shave around 200 basis points off corporate operating profitability this fiscal year, from an expected 12% in 2026-27 (Apr-Mar), according to a stress test of 34 sectors by Crisil Ratings Ltd. However, it sees Indian corporate companies remaining resilient on the back of strong balance sheets, steady domestic demand, and government-led capital expenditure, enabling companies to navigate profitability pressures arising from ongoing geopolitical uncertainties.

 

"We have assumed supply-chain disruptions could last for nine months this fiscal (compared with six months in our base
case), with crude oil prices averaging $110 per barrel for this fiscal (versus a base case assumption of $95)," Crisil said. "For companies, managing costs and profitability will be a bigger challenge than achieving topline growth... we foresee the credit quality of only eight sectors, accounting for 10% of our rated corporate debt, being materially impacted," Crisil Ratings Managing Director Subodh Rai said.

 

Foreign institutional investors continued their selling spree Friday, while domestic investors supported the equity market. Foreign portfolio investors net sold shares worth INR 44.40 billion Firday, while domestic investors net bought shares worth INR 60.04 billion. Foreign investors net sold shares worth INR 257.82 billion in the last seven days, while domestic investors net bought shares worth INR 123.84 billion in the same period. "Domestic institutions and retail investors have supported this resilience, even as foreign funds have remained largely on the selling side," Ritaban Basu, chief executive officer at B2K Analytics, said in a note.

 

The rupee rose sharply against the dollar to an over two-week high Monday as Brent crude oil price fell below $100 a barrel. "The rupee recovery is also being aided by softer crude prices and improving sentiment in global markets, though movement ahead will continue to depend heavily on final developments in US–Iran negotiations and energy market stability," Jateen Trivedi, commodity and currency research analyst at LKP Securities, said in a note.  End

 

US$1 = INR 95.23

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

 

Edited by Saji George Titus

 

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