Global Rally, Falling Oil Prices Signal Positive Start for Indian Markets

Mumbai, May 7:Indian equity benchmarks are likely to open on a strong note on Thursday, mirroring a global rally across Asian, European and US markets after hopes of a possible peace framework between the United States and Iran boosted investor sentiment and triggered a sharp correction in crude oil prices.

Asia Advances

Asian shares advanced sharply on Thursday, with Japan’s Nikkei surging to a fresh record high above the 62,000 mark, while markets in South Korea and Taiwan also extended gains amid continued optimism around artificial intelligence-driven demand and easing geopolitical tensions. MSCI’s broadest index of Asia-Pacific shares outside Japan rose nearly 1%, adding to strong weekly gains.

Crude Corrects

Investor confidence improved after reports suggested Iran was considering a proposal aimed at ending the Gulf conflict, reducing fears of prolonged disruptions to global oil supplies and shipping routes. The development sparked a steep decline in crude prices overnight, with Brent crude tumbling nearly 8% on Wednesday.

The correction in oil prices is expected to support sentiment in India, which remains heavily dependent on crude imports. Softer oil prices typically ease concerns around inflation, fiscal pressures and input costs for companies, making them a major positive for domestic equities. Sectors such as aviation, paints, chemicals and oil marketing companies could particularly benefit if crude remains subdued.

US Rallies

Wall Street also ended at record highs overnight, supported by strong technology earnings and optimism around artificial intelligence spending. U.S. stock index futures continued to edge higher as investors welcomed improving geopolitical conditions and signs of resilient corporate earnings growth. S&P 500 companies are on track for their strongest quarterly earnings expansion in more than four years. 

Europe Gains

European markets posted broad-based gains on Wednesday, with the pan-European STOXX 600 index climbing more than 2% to its highest level in nearly three weeks. Travel, industrial and banking stocks led advances across the region as lower fuel costs and reduced geopolitical uncertainty improved the broader risk outlook. France’s CAC 40 and Italy’s FTSE MIB were among the strongest performers.

Back Home

Indian benchmarks had already ended sharply higher in the previous session, with the Sensex and Nifty 50 gaining around 1.2% each amid renewed foreign buying and easing oil prices. GIFT Nifty trends indicated another firm opening for domestic equities on Thursday.

Market participants will now monitor whether the global risk appetite sustains, while also tracking crude oil movement, foreign institutional investor activity and upcoming US economic data for further direction.

Source:

• Exchanges