Indian equity benchmarks BSE Sensex and Nifty50 are likely to see a positive start on Thursday, supported by the signing of an interim peace agreement between the US and Iran and a continued decline in crude oil prices, according to The Times of India.
Wall Street Ends Lower on Fed Rate Hike Signals
All three major US indices closed lower overnight, each losing close to or more than 1%, after investors interpreted comments from new Federal Reserve Chair Kevin Warsh and policymakers' projections as signalling the possibility of higher interest rates later this year to address inflation, The Times of India reported.
| Index | Close | Change | % Change |
|---|---|---|---|
| Dow Jones Industrial Average | 51,492.55 | -507.12 | -0.98% |
| S&P 500 | 7,420.10 | -91.25 | -1.21% |
| Nasdaq Composite | 26,021.66 | -354.69 | -1.34% |
The sell-off came despite a bounce in S&P 500 futures, which rose 0.81% to 7,484.8, as per the report.
US-Iran Interim Peace Agreement and Crude Oil Slide
The US and Iran signed an interim peace agreement, extending the ceasefire first announced in April by an additional 60 days, giving both sides more time to work toward a permanent settlement. Despite the breakthrough, US President Donald Trump warned that military action could resume and Iranian officials could be targeted if Tehran failed to comply with the terms. Kyle Rodda, senior financial market analyst at Capital.com, noted that geopolitical risks remain significant and are likely to continue influencing market movements.
Crude oil prices softened further, with US oil falling 1.25% to $75.83 a barrel and Brent crude declining 1.4% to $78.41 per barrel. The recent decline in oil prices has started to alleviate concerns about a broader economic slowdown, particularly in Europe, which relies heavily on imported energy, The Times of India reported. Separately, the International Energy Agency (IEA) said on Wednesday that the oil market could shift into a substantial supply surplus in 2027 following a recovery from the disruption caused by the closure of the Strait of Hormuz.
Indian Market Technical Outlook: Bullish Bias
The report noted that the Nifty index formed a bullish candlestick pattern and continues to consolidate within Monday's price range, signalling consolidation with stock-specific action. PSU banking stocks outperformed on Wednesday, with the Nifty PSU Bank Index closing the session higher by more than 1.5%. The Bank Nifty, after a strong rally of 4,800 points in just 10 sessions, is witnessing consolidation in the last three sessions amid stock-specific action.
A key observation in the daily chart is that the 20-day EMA has generated a bullish crossover above its 50-day EMA, supporting the positive bias in the index. The report expects the index to head towards 58,300 and 59,000 levels in the coming weeks, based on measuring the implication of the recent four-week range breakout (52,700–55,500). The index sustaining above 55,500–56,000 will keep the short-term bias positive, and any dips should be viewed as buying opportunities. Only a decisive breach below the 55,500 support level would negate the positive outlook.
Currency and Bond Markets
In currency markets, the dollar gained marginally against the yen to 160.65 after reaching 160.79 overnight, its strongest level since July 2024. The dollar index slipped 0.03% to 100.32, while the euro strengthened 0.1% to $1.1511. The yield on the benchmark 10-year US Treasury note edged up to 4.471% from Wednesday's close of 4.463%, while the two-year Treasury yield rose to 4.1759% from 4.163%, according to The Times of India.
Asian equity markets were largely unchanged on Thursday, with Japan's Nikkei climbing to a fresh record high above the 71,000 mark for the first time, supported by strong gains in semiconductor and AI-linked stocks. South Korean equities advanced 0.9%.
Next Milestone
Investors will now focus on the Bank of England's policy meeting, where markets broadly expected no change in interest rates, leaving attention on policymakers' commentary for future clues. The durability of the US-Iran peace arrangement and the trajectory of Fed policy remain key macro drivers for global equity markets.
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