The Indian stock market benchmark indices, BSE Sensex and Nifty 50, are likely to open higher on Friday, tracking a strong overnight rally in global markets as investors welcomed growing hopes of a US–Iran peace agreement after US President Donald Trump called off planned strikes against Iran.

Asian markets advanced sharply, while the US stock market posted strong gains overnight, with all three major Wall Street indices recording their biggest single-day percentage rise since April 8.

However, on Thursday, the Indian stock market closed lower as escalating tensions in the Middle East weighed on sentiment and reduced expectations of a near-term resolution to the conflict.

Domestic Market Recap

On Thursday, Indian indices ended red:

• Sensex slumped by 150.63 points (0.20%) to close at 73,832.55
• Nifty 50 moved down by 53.35 points (0.23%) to settle at 23,161.60

Gift Nifty

Gift Nifty was trading near 23,487, around 287 points higher than the previous Nifty futures close, hinting at a positive start for Indian markets.

Overnight Wall Street Performance

The US stock market ended with strong gains on Thursday after US President Donald Trump announced that he had canceled planned strikes against Iran, boosting investor confidence and easing concerns over a broader conflict in the Middle East. The rally lifted all three major Wall Street indices, with technology and semiconductor stocks leading the advance.

• The Dow Jones Industrial Average soared by 929.97 points (1.86%) to close at 50,848.75.
• S&P 500 was up by 127.31 points (1.75%), ending at 7.394.30.
• The Nasdaq Composite was higher by 640.16 points (2.54%), finishing at 25,809.66.

Crude Oil Prices

Crude oil prices extended their decline after US President Donald Trump canceled planned military strikes on Iran, easing fears of a broader conflict in the Middle East and reducing concerns over potential disruptions to global energy supplies. The de-escalation in geopolitical tensions improved market sentiment and weighed on oil prices.

• Brent crude slipped by 1.30% to $89.17/barrel
• US West Texas Intermediate (WTI) crude was trading 1.40% lower at $86.48/barrel

Overnight Major Global Events Driving Sentiment

1. US–Iran Peace Deal: US President Donald Trump said that the United States and Iran could sign a peace agreement as early as this weekend, a move that could reopen the Strait of Hormuz to global shipping. However, Iran responded that it has not yet made a final decision on the proposed deal.
2. US Producer Prices: US producer prices rose more than expected in May, recording the strongest annual increase in three-and-a-half years. The Producer Price Index (PPI) for final demand climbed 1.1% during the month, matching April’s revised increase and exceeding economists’ forecast of 0.7%. On a year-on-year basis, producer inflation accelerated to 6.5%, the highest level since November 2022.
3. ECB Rate Hike: The European Central Bank raised interest rates for the first time in nearly three years, increasing its deposit rate by 25 basis points to 2.25%. The ECB became the first major central bank to tighten monetary policy in response to inflationary pressures stemming from the energy shock linked to the US–Iran conflict.
4. India GDP Growth: World Bank projected that India will remain the world’s fastest-growing major economy in FY27, with GDP expected to expand by 6.6%. However, the forecast indicates a moderation from the 7.7% growth recorded in the previous fiscal year.

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