Indian shares set to join global rally on Gulf peace deal, oil slides
Indian shares are set to open higher on Monday, tracking a global rally, while oil prices tumbled after U.S. President Donald Trump and Iran's deputy foreign minister said an initial deal had been reached to end the war and resume traffic through the Strait of Hormuz.
The countries will sign a memorandum of understanding in Switzerland on Friday, said Pakistani Prime Minister Shehbaz ?Sharif, whose country served as a mediator in the negotiations.
GIFT Nifty futures were trading at 23,983.5 as of 7:38 a.m. IST, indicating that the benchmark Nifty 50 would open about 1.5% above Friday's close of 23,622.90.
The Nifty 50 and BSE Sensex rose about 2% and 2.3% on Friday as optimism of a diplomatic breakthrough in the four-month long U.S.-Iran war boosted risk appetite.
Other Asian markets jumped 2.4%, while Brent crude dropped 4.1% to $84 a barrel, the lowest since March. [MKTS/GLOB]
Lower oil prices are a positive for India, the world's third-largest oil importer, as they help ease pressure on inflation, the rupee and the country's trade deficit.
"The diplomatic resolution in the Middle East reduces geopolitical risk, and the resulting crude oil price decline is especially beneficial to India, as it eases inflationary pressures and improves the macroeconomic outlook," said Pravesh Gour, senior technical analyst at Swastika Investmart.
Foreign portfolio investors offloaded Indian stocks worth 10.82 billion rupees ($113.77 million) on Friday, while domestic institutional investors bought shares worth 53.41 billion rupees, according to NSE's provisional data.
For the year, FPIs have offloaded a record $30.7 billion, pressured by the Iran war and limited exposure to the global AI-led rally. Analysts said a resolution of the Middle East conflict could help revive foreign outflows.
Both the Nifty and Sensex have lost 6.2% and 7.1% since the start of the Iran war in late February.
STOCKS TO WATCH
** Oil marketing companies, tyre, paint makers and airlines could rise on drop in crude prices
** Dr. Reddy's announces the first-to-market launch of Bosulif drug, indicated for the treatment of chronic myeloid leukemia, in the U.S.
** Aurobindo Pharma says U.S. drug regulator classifies its arm's Telangana manufacturing facility, Eugia Pharma, as "official action indicated", with 11 observations after its inspection
($1 = 95.1000 Indian rupees)
