Indian stock markets are positioned for a positive opening next week following a sharp selloff, with GIFT Nifty rising over 219 points, or more than 0.9%, to 24,366 as of 8:50 am on Friday. According to The Economic Times, this recovery comes after the Indian stock market tumbled on Thursday, with Sensex and Nifty cracking over 0.7% each as oil prices soared to historic levels. The Sensex declined more than 249 points and Nifty fell below 24,000 during the week, erasing all gains recorded earlier in the week.
India's small-cap stocks experienced their strongest monthly rally in at least a decade during April, with the Nifty Smallcap 250 index jumping 17.1% - the highest monthly gain since its inception in April 2016. As reported by The Economic Times, this surge followed a period where nearly 66% of small-cap stocks had fallen in March, creating bargain buying opportunities. Feroze Azeez, joint CEO of Anand Rathi Wealth, noted that the correction brought back investor interest into quality small-cap businesses where growth prospects remained strong despite price falls. HFCL, Ola Electric Mobility, Cohance Lifesciences, Cemindia Projects, Gallantt Ispat and Welspun Corp soared between 56% and 71% in April, emerging as the biggest contributors to the index's gains.
Oil prices have shown some cooling after hitting as high as $126 per barrel yesterday, but continue to remain elevated above $110 per barrel today. As reported by The Economic Times, the war between Iran and US has now entered its third month, with the Strait of Hormuz continuing to remain choked and keeping investors on edge. US President Donald Trump said that the military blockade of Iranian ports could last for months, with plans for a series of fresh military strikes to compel Iran to negotiate an end to the conflict. Iran has responded by saying it would respond with 'long and painful strikes' on US positions if Washington renewed its strikes. The current geopolitical situation has created multiple uncertainties beyond just oil prices, with questions about ceasefire timelines, potential renewed conflict, and the reopening of the Strait of Hormuz adding to market volatility.
Foreign investors remained net sellers of Indian equities for the eighth consecutive session yesterday, with net selling Indian shares worth nearly ₹8,048 crore on Thursday, according to provisional data on NSE as reported by The Economic Times. While this does not reflect what their trading activity will be next week, sustained FII selling dampens investor sentiment and fuels the selloff in the market. The rupee has also plunged to an all-time low, adding to investor concerns about capital outflows.
Vinod Nair, Head of Research at Geojit Investments, noted that global sentiment deteriorated sharply as US–Iran tensions escalated and major maritime shipping routes faced continued disruption. According to The Economic Times, he highlighted that rising oil prices weighed on the INR and revived worries about capital outflows and widening deficits, given the economy's heavy reliance on crude imports. Domestically, autos, banks, metals, and real estate led the decline, while IT and pharma saw selective defensive buying. The current oil price spike represents a familiar pattern for Indian markets, as crude oil prices have historically created volatility for the Nifty and Sensex, with the difference this time being the additional uncertainties surrounding the ongoing geopolitical conflict. Key events to track on May 1 include US and Japan's April 2026 Manufacturing PMI as highlighted by Sunny Agrawal, Head of Fundamental Research at SBI Securities.
