Nifty 50 Surges 1.6% to 24,774 on Oil Drop and Iran Talks

India’s benchmark Nifty 50 index surged 390.70 points, or 1.6%, to close at 24,774.30 on August 3, extending a four-day winning streak. The rally was driven by a sharp 5% fall in global crude oil prices after U.S. President Donald Trump halted planned military strikes against Iran and signaled the start of fresh diplomatic negotiations. Falling energy costs reduced inflation pressures on India’s import-dependent economy, while foreign institutional investors returned to buy equities worth ₹277.48 crore on July 31.

Why crude oil’s 5% drop fueled the market rally

Brent crude, the global oil benchmark, fell 4.97% to $83.56 per barrel on August 3, while U.S. crude dropped 5% to $80.79 per barrel. Trump ordered U.S. forces to hold off on new strikes against Iran after claiming a deal to end the five-month conflict was near. Lower oil prices ease India’s import bill and reduce inflation, a key concern for the Reserve Bank of India. Ponmudi R, CEO of Enrich Money, said easing geopolitical tensions prompted investors to unwind the recent risk premium built into energy costs.

IT stocks and financial shares lead the charge

Information technology stocks emerged as the biggest drivers, with the Nifty IT index gaining over 3%. Top performers included InterGlobe Aviation, TCS, Infosys, Shriram Finance and Grasim Industries. The BSE Sensex rose 544.39 points, or 0.70%, to 78,639.03. Market breadth remained positive: 2,837 stocks advanced while 1,552 declined and 206 remained unchanged on the BSE.

Foreign investors return after months of outflows

Foreign institutional investors turned net buyers in July, marking the first month of positive equity inflows since February. The Reserve Bank of India reported the country attracted $40.8 billion in foreign currency inflows since mid-June through FNCR(B) deposits and external commercial borrowings. V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that the combination of lower crude oil, good monsoon progress in July, and returning FIIs created multiple positive triggers for the market.

Meyka data shows Nifty at a crossroads

Meyka grades the Nifty 50 a C+ with a HOLD recommendation based on a score of 58.83. The index’s RSI stands at 59.36, near overbought territory, while the Stochastic indicator at 90.82 signals strong momentum. Over 12 months, Meyka forecasts the index at 27,901, implying 12.6% upside from current levels. However, the index remains down 6.68% year-to-date and 3.70% over six months, reflecting earlier weakness.

Final Thoughts

The Nifty 50’s four-day rally reflects a genuine shift in sentiment: lower oil costs ease inflation, geopolitical risks have receded, and foreign money is flowing back. With Meyka grading the index C+ and forecasting 27,901 by year-end, the data suggests modest upside remains, but investors should watch for any reversal in Iran talks or crude prices.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.