FINANCE | Peace hopes, rupee movement, crude oil to shape market mood this week

Indian stock markets bounced back strongly on Friday, with both the Sensex and Nifty rising by nearly 2 per cent. Investor confidence improved due to growing expectations of a peace agreement between the United States and Iran, falling crude oil prices, and positive global market sentiment.

The rally increased the combined market value of companies listed on the BSE by almost Rs 10 lakh crore, taking the total market capitalisation to about Rs 462 lakh crore. The following factors are likely to shape market sentiment in the coming days.

Expectations of US-Iran Peace Agreement

US President Donald Trump stated on Thursday that the United States and Iran could finalise a peace agreement as early as this weekend. Such a deal could lead to the reopening of the Strait of Hormuz, a vital route for global oil shipments.

Speaking at the White House, Trump said that significant progress had been made towards ending the conflict. He added that the agreement could be signed soon, possibly during meetings in Europe, and indicated that Vice President JD Vance could sign it on behalf of the United States. Trump also suggested that Iran’s Supreme Leader, Ayatollah Mojtaba Khamenei, had reportedly approved the arrangement.

Crude Oil Prices Remain Important

Oil prices dropped to their lowest level in three months after Iranian media reported that a draft agreement between Iran and the United States includes plans to ease US oil sanctions and reopen the Strait of Hormuz within 30 days.

According to reports, the proposed 14-point agreement would move forward only after part of Iran’s frozen assets are released, sanctions are suspended, and the naval blockade is removed. If oil prices continue to decline, it could provide further support to the Indian economy and stock market.

Direction of the Indian Rupee

The Indian rupee strengthened by 60 paise to 95.25 against the US dollar in early trading. Market experts believe that crude oil prices, foreign investment flows, and overall global risk sentiment will continue to play a major role in determining the currency’s direction.

During the week, the USD/INR pair moved between 94.90 and 95.75 before ending close to 95.10. Technical indicators suggest a slight strengthening of the rupee. Resistance is seen around 95.30–95.40, while support levels are placed near 94.75–94.65. A move below these support levels could lead to further rupee gains.

Positive Global Market Trends

US stock markets ended higher on Friday, supported by strong investor enthusiasm following SpaceX’s stock market debut and optimism surrounding a possible US-Iran peace deal.

The S&P 500 gained 0.5 per cent, the Nasdaq Composite rose 0.31 per cent, and the Dow Jones Industrial Average advanced 0.7 per cent. SpaceX began trading at $150 per share, above its initial public offering price of $135, and closed the day around 19 per cent higher.

Asian markets also recorded strong gains. South Korea’s Kospi jumped 5 per cent, while Japan’s Nikkei 225 rose 3 per cent. Continued strength in overseas markets could provide additional support to Indian equities.

Technical Indicators

According to Sudeep Shah of SBI Securities, Friday’s rally was technically significant because the Nifty closed above its 20-day Exponential Moving Average (EMA) for the first time since May 2026, signalling improved short-term momentum.

Other technical indicators have also turned positive. The Relative Strength Index (RSI) has moved above the 50 level, while the Daily Stochastic indicator has generated a bullish crossover.

Based on these signals, Shah believes the Nifty could rise towards 23,800 and potentially test the 24,000 level. On the downside, the 23,350–23,300 range is expected to provide strong support. As long as the index stays above this zone, bullish sentiment is likely to remain intact. The coming trading sessions will indicate whether the recent rise is simply a recovery or the beginning of a stronger upward trend.