MUMBAI: As talks of a peace deal in West Asia revived on Thursday night, sending Dow Jones up over 900 points and pulling Brent crude prices below the $90-per-barrel mark, the rub-off effect was felt on Dalal Street on Friday. Sensex, after rising more than 1,000 points in early trades, and dipping slightly mid-session, closed 1,695 points up at 75,528 points. The fall in crude oil prices also strengthened the rupee against the dollar.On Thursday, after issuing threats on an imminent US strike on Iran, President Donald Trump reversed his stand, saying a deal with the country was nearing. This statement also prompted crude prices to slide sharply. At one point, Brent crude prices fell to $85.8, a three-month low.
Peace deal hopes rescue
Part of the rise in the domestic market, especially during the last hour of trading, was attributed to short covering by traders who had earlier bet on a slide in the market, dealers said.The day’s rise in sensex was the third-best single-session points gain for the index in 2026. Friday’s market rally made investors richer by Rs 9.7 lakh crore with BSE’s market capitalisation now at Rs 462 lakh crore, exchange data showed.According to Siddhartha Khemka of Motilal Oswal Financial Services, reports indicating that negotiations between the US and Iran were nearing completion, reduced fears of prolonged disruptions to global crude oil supplies, pushing oil prices below the $90 per barrel mark. “The sharp market recovery suggests that investors are beginning to price in a more favourable geopolitical outcome. While a formal agreement remains pending, the moderation in crude oil prices and the appreciation of the rupee against the dollar have improved the near-term outlook for domestic equities.”Going forward, global cues will remain important, with the US Federal Reserve’s policy meeting and US industrial production data likely to provide direction to financial markets, Khemka said.“Additionally, developments in the US-Iran negotiations, crude oil price movements and foreign fund flows will remain key factors influencing market sentiment.”The day’s gains were backed by strong buying by domestic funds while foreign funds continued to be net sellers. At the close of the session, while domestic institutional investors reported a net inflow of Rs 5,341 crore, foreign portfolio investors (FPIs) were net sellers at Rs 1,082 crore, BSE data showed.The rising possibility of a US-Iran peace agreement that pulled crude oil prices down, strengthened the rupee on Friday. The Indian currency opened more than 40 paise firmer from Thursday’s close at 95.76/$, briefly traded above 95 and finally settled at 95.11, up 65 paise for the day.
