Indian Stock Market Rallies on Support Levels, US-Iran Diplomacy May Boost Nifty 50 to 25,000 This Month

Global Cues and Crude Oil Prices Lift Indian Stock Market Sentiment

The prospects of a potential peace deal between the US and Iran have boosted stock market sentiment, with the benchmark Nifty 50 reclaiming the 24,400 mark in intraday trade on Thursday, 7 May. This marks the index's second consecutive week of gains, with a 10% jump from its 2 April low of 22,182.55. The current setup of the Indian stock market appears mildly positive, supported by positive global cues and a decline in crude oil prices, even as lingering uncertainty about a final US-Iran peace deal keeps volatility elevated.

Key Factors to Watch

The headline-sensitive market is closely monitoring the news flows about the deal that can potentially end the West Asian conflict. According to reports, the US had sent a one-page memorandum of understanding to Iran through Pakistani mediators to settle the conflict. Iran is reportedly reviewing the proposal. If a peace deal is announced, analysts predict that crude oil prices could cool towards the $80 per barrel mark or even lower, paving the way for a strong rally in the Indian market.

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Indian Stock Market Outlook

While a potential peace deal between the US and Iran would certainly be positive for the Indian market, crude oil prices remain the key variable to watch. "Crude should cool towards the $80 per barrel mark or even lower for markets to sustain a strong rally," said Vinod Nair, Head of Research, Geojit Investments. Nair added that positive developments may trigger a sharp short-term bounce, but after that initial excitement, investors will again focus on fundamentals such as crude prices and global economic conditions.

Market Expectations

Rohit Srivastava, the founder and market strategist at Indiacharts.com, believes it is a bit early to say that the Nifty 50 may rise to 25,000 in May itself. Srivastava highlighted that the index is caught between 24,300 and 23,800, with a wide range of 24,450 on the upside and 23,550 on the downside in which it can keep moving in May.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Comparison of Market Experts' Views

Market Trends and Volatility

The domestic markets continue to witness buying at lower levels, but traders are likely to remain selective amid profit booking at higher zones, according to Hitesh Tailor, a research analyst at Choice Equity Broking. Tailor highlighted that immediate support is placed in the 24,000–24,200 zone, while resistance is seen in the 24,550–24,600 range. RSI indicates strengthening momentum, while easing India VIX and derivatives data reflect a positive market bias.