Indian Shares Rally on US-Iran Peace Deal Hopes, Lower Oil Prices

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Indian shares are expected to extend their rally on Thursday as hopes of a peace deal between the U.S. and Iran pulled oil prices lower, although Washington's shipping blockade at the crucial Strait of Hormuz remained a key risk. GIFT Nifty futures were trading higher, indicating the benchmark Nifty 50 will open above Wednesday's close. Asian markets also pushed higher, rising 0.7%. India's Nifty 50 and Sensex advanced 1.6% on Wednesday to hit a one-month high after the U.S. said talks with Iran could resume soon in Pakistan.

Why it matters

Lower crude prices are a positive for India, the world's third-largest oil importer, as they help ease the import bill, inflation, and pressure on corporate margins. The war has resulted in the largest-ever disruption of global oil and gas supplies by choking traffic through the strait, pushing crude prices as high as almost $120 per barrel.

The details

Brent crude slipped below $95 on Thursday after reports that Iran could consider allowing ships to pass through around the strait, outweighing concerns over ongoing supply disruptions. Foreign investors, who have been aggressive sellers of Indian equities amid the war, bought 6.66 billion rupees ($71.34 million) worth of shares on Wednesday, per provisional data. This will be their second session of net buying in India since the conflict began in late February. U.S. President Donald Trump said he believes the war is nearly over, even as the shipping blockade he announced came into effect.

• On Wednesday, the Nifty 50 and Sensex advanced 1.6% to hit a one-month high.
• On Thursday, Brent crude slipped below $95 per barrel.

What they’re saying

What’s next

Investors will be monitoring the earnings season, with IT company Wipro and HDFC Life Insurance Company scheduled to report their January-March results on Thursday.