Nifty, Sensex to rally more on Monday? Iran peace deal among 5 factors to dictate Dalal Street this week

The rally added nearly Rs 10 lakh crore to the combined market capitalisation of BSE-listed companies, taking the total market value to around Rs 462 lakh crore. Here are 5 factors that will decide market mood.

Iran deal hopes

US President Donald Trump on Thursday said the United States and Iran could sign a peace deal as early as this weekend, a development that could reopen the Strait of Hormuz for shipping. Speaking to reporters at the White House, Trump said, “We just made a great settlement of the war with Iran.””The strait will officially open as soon as we sign, which could be soon, very soon, maybe over the weekend in Europe,” he added, noting that Vice President JD Vance could sign on behalf of the United States.

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When asked whether Iran’s Supreme Leader Ayatollah Mojtaba Khamenei had approved the deal, Trump said, “I understand the answer is yes.”

Can oil prices extend slide

Oil prices fell to a three-month low on Friday after Iranian state media reported that a draft memorandum of understanding between Iran and the United States includes a commitment by Washington to ease oil sanctions and a pledge by Tehran to reopen the Strait of Hormuz within 30 days.According to Iran’s Mehr News Agency, the 14-point document states that final negotiations will begin only after half of Iran’s frozen assets are released, US oil sanctions are suspended and the naval blockade is lifted.

Will rupee strengthen more?

The Indian rupee strengthened by 60 paise to 95.25 against the US dollar in early trade. “Going ahead, crude oil movement will remain the key driver for the currency, along with capital flows and global risk sentiment.”

USD/INR witnessed a volatile week, trading within a broad Rs 94.90-Rs 95.75 range before settling near Rs 95.10. The pair closed near the lower end of its ascending trendline channel, indicating a modest strengthening of the rupee during the week. Immediate resistance stands at Rs 95.30-Rs 95.40. A sustained move above this level could ease near-term bearish pressure and push prices back towards Rs 95.60-Rs 95.80. On the downside, the previous reversal low near Rs 94.75-Rs 94.65 remains a key level to watch. A confirmed break below could drag the pair towards Rs 94.40, with a stronger base seen near Rs 94.20.

The near-term bias remains cautious, driven by a fragile geopolitical backdrop influencing dollar demand alongside the strength of domestic policy support.

Global support

US stocks advanced on Friday as SpaceX’s strong market debut lifted sentiment, while investors remained hopeful about a potential peace deal between the United States and Iran. The S&P 500 rose 0.5% to close at 7,431.46, while the Nasdaq Composite gained 0.31% to finish at 25,888.84. The Dow Jones Industrial Average climbed 353.51 points, or 0.7%, to settle at 51,202.26.

Elon Musk’s rocket maker debuted on the Nasdaq at $150 per share under the ticker SPCX, above its IPO price of $135. The stock surged more than 20% shortly after listing and ended the day up 19% at around $161.

Asian markets also joined the rally, led by a sharp rise in technology stocks. South Korea’s Kospi surged 5%, while Japan’s Nikkei 225 ended 3% higher. A continuation of the positive global momentum amid hopes of an Iran peace deal could help the Nifty and Sensex draw strength from favourable overseas cues.

Charts show promise

Sudeep Shah of SBI Securities said Friday’s rally carries added significance from a technical standpoint, as the Nifty closed above its 20-day EMA for the first time since May 2026, indicating an improvement in short-term momentum.

The daily RSI has rebounded sharply from lower levels and is now trading above the 50 mark while also moving above its 9-day average. Meanwhile, the Daily Stochastic has generated a bullish crossover, further reinforcing the positive undertone.

With multiple indicators turning favourable simultaneously, the obvious question is how much room the rally still has. According to Shah, the recent breakout above key short-term resistance levels, coupled with improving momentum indicators, suggests that the index could extend its upmove towards 23,800, followed by the psychological 24,000 mark.

On the downside, the 23,350-23,300 zone is expected to act as a crucial support area. As long as this support remains intact, the bulls appear to have regained control. The next few sessions, however, will determine whether the move is merely a rebound or the start of a stronger uptrend.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)