Sensex, Nifty Rally on US-Iran Peace Hopes, Softer Oil Prices

Additionally, appreciation in the rupee and a cooling in crude oil prices kept trader sentiment upbeat, leading to broad-based buying across sectors, said analysts.

At close on Friday, Sensex surged by 504.86 points or 0.65 per cent to settle at 78,493.54, while Nifty gained 156.80 points or 0.65 per cent to close at 24,353.55.

On the sectoral front, buying interest was seen across most sectors, with the market trading on a positive undertone, according to a note by Bajaj Broking Research.

The key gains were witnessed in Nifty FMCG, Metal, and Oil and Gas indices, which advanced in the range of 1 per cent to 3 per cent, while Nifty IT remained a laggard.

The broader market outperformed the benchmark indices, with the Nifty Midcap rising around 1.27 per cent and the small cap index advancing approximately 1.48 per cent, said the note.

Indian equity markets staged a steady and orderly recovery through the week, supported by an improvement in global sentiment and a sharp moderation in crude oil prices.

While the broader undertone remained cautious, indices closed with meaningful gains, underpinned by consistent buying interest and a gradual pickup in risk appetite.

"Price action was notably more stable compared with recent weeks, with dips attracting buying interest - an indication that sentiment is beginning to strengthen. However, despite the recovery, markets have yet to deliver a decisive breakout at higher levels, suggesting the trend remains in transition rather than firmly established," said Ponmudi R, CEO of Enrich Money.

Overall, sentiment has shifted toward a cautiously optimistic stance.

Softer crude prices, improving global cues and more stable flows are supporting the recovery, said analysts.

Downside risks appear relatively contained in the near term, while upside momentum is gradually building - suggesting a transition from recovery toward a more stable structure, albeit one still dependent on external catalysts, they added.

Notably, foreign institutional investors have begun to show early signs of stabilisation following a prolonged period of outflows.

FIIs turned net buyers in the final three sessions of the week, lending support to the recovery and improving overall sentiment.

On a cumulative basis, flows remained marginally negative for the week at around Rs 250 crore. In contrast, domestic institutional investors, who had been providing consistent support, turned net sellers in the final sessions, reflecting some profit-taking at higher levels.

On a weekly basis, DII outflows stood at approximately Rs 6,300 crore.

Despite this near-term shift, their broader role as a stabilising force remains intact, continuing to provide structural support to the market.

- IANS