DALAL STREET POSTS BEST WEEK IN MONTHS AS OIL CRASHES TO PRE-WAR LEVELS, IRAN PEACE TALKS ADVANCE IN DOHA, AND INDIA-US TRADE OPTIMISM FUELS BROAD-BASED RALLY
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The week ending July 3, 2026 will be remembered as one of the most consequential and most rewarding for Indian equity investors in the entire five-month arc of the US-Iran conflict. A near-perfect alignment of macro tailwinds — crude oil returning to pre-war levels below $71 per barrel, constructive indirect peace negotiations in Doha, a weaker-than-expected US jobs report that dampened Federal Reserve rate-hike fears, continued optimism around the India-US trade framework, and strong results from domestic banking heavyweights — propelled the Sensex and Nifty to their strongest weekly performance since the conflict began in late February. By Friday, the backdrop for Indian markets had been transformed: energy prices that had throttled the economy for months were retreating sharply, the rupee was firming, foreign institutional investors were returning, and the mood on Dalal Street had shifted from cautious survival to confident recovery.
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INDIAN MARKETS — WEEKLY PERFORMANCE
The BSE Sensex ended the week at 77,763.91, posting a weekly gain of approximately 0.34% from last week's close and a monthly gain of 4.81%. More tellingly, the index has now risen approximately 4.07% over the past month, a sharp recovery from the multi-month lows near the 73,000–74,000 zone seen in late May and early June. The Sensex closed about 0.75% firmer at 77,502 on Thursday, extending previous session gains, amid positive global cues and renewed strength in IT stocks. Investors were encouraged by falling oil prices and expectations that central banks may adopt a less aggressive policy stance if inflation continues to cool.
Optimism over constructive US-Iran talks in Doha, coupled with Fed Chair Kevin Warsh's reassuring inflation remarks, supported market sentiment through the week. Tech stocks were the standout performers, with Infosys, Tech Mahindra, and other frontline IT companies rising between 4% and 5.6%, on bargain hunting after a four-day losing streak and optimism over tech spending. Other top gainers included Bajaj Finserv, Adani Ports, Titan, and ICICI Bank.
On Friday, Indian equity benchmarks built on their morning gains, tracking overnight Wall Street gains and broadly rising Asian shares. The BSE Sensex was trading up 591.85 points or 0.76% at 78,093.97 and Nifty 50 was 185.85 points or 0.77% higher at 24,361.55 as of the midday mark. HCL Technologies was the top gainer in the Nifty pack, zooming 6.3%, while shares of Tech Mahindra climbed 3.17%.
In the broader market, buying was spread across indices with Nifty 100 and Nifty 200 advancing 0.61% and 0.50% respectively. Nifty IT led the gains, followed by Nifty Healthcare and Nifty Pharma, as they rose 2.25%, 2%, and 1.92% respectively on strong buying interest in IT services and healthcare companies along with major drugmakers. The Nifty PSU Bank index was the top laggard on the day, slumping 1.27%, while Nifty Energy fell 1.08%.
The week's most dramatic single-session event for Indian markets came from a development that had nothing to do with the usual suspects. Iran declared Friday as the beginning of a week of mass mourning for Supreme Leader Ayatollah Ali Khamenei, who was assassinated in a US-Israeli strike. Plans for mass processions were announced by officials in Qom and Mashhad within coming days. Ayatollah's son Mojtaba Khamenei succeeded him as the new supreme leader of Iran. Tehran did not respond aggressively overnight after the strike, which prevented a further escalation in regional tensions. Paradoxically, markets interpreted the absence of an aggressive Iranian retaliatory response as a signal that the ceasefire framework signed on June 17 remains broadly intact, allowing risk appetite to hold.
The Nifty 50 ended the week at 24270.85 posting a gain of 0.39% index's 52-week range stands at 22,182.55 to 26,373.20, with the index having declined approximately 5.62% over the past twelve months but gained 4.07% over the past month — demonstrating the sharp reversal in momentum since the Iran ceasefire framework and the Strait of Hormuz reopening began to take hold. Indian equity markets navigated a week of mixed signals with notable resilience, ending the truncated four-day week the prior period marginally higher, even as broader indices especially mid-caps faced modest selling pressure. The sharp correction in crude oil prices to pre-war levels, supported by improved traffic at the Strait of Hormuz, easing geopolitical risks amid progressing US-Iran talks, and optimism around an India-US trade deal, helped fuel domestic investor sentiment.
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ASIAN MARKETS — WEEKLY REVIEW
Asian markets closed the week broadly higher, powered by the dual tailwinds of falling oil prices and the continued, albeit fragile, progress in US-Iran peace diplomacy — with Japan leading the charge and China the notable underperformer.
Asian shares rose broadly on Friday, with Hong Kong's Hang Seng jumping 1.93% and Japan's Nikkei 225 gaining 0.78%. The positive Friday close capped a constructive week for the region after a turbulent mid-week episode. Brent crude oil prices declined by around 2% toward $70 per barrel on Thursday, extending losses for the third straight session to pre-war levels as maritime supply through the Strait of Hormuz rapidly expanded. The United Arab Emirates restored its exports to over 3.9 million barrels daily, pushing total daily Hormuz flows past 10 million barrels.
Japan's benchmark Nikkei 225 was among the strongest performers of the week, buoyed by the AI and semiconductor upcycle that continued to provide structural support even as geopolitical noise created occasional volatility. The Topix rose alongside the Nikkei, with technology and export-oriented names benefiting from the prospect of a stronger yen. However, the Japanese currency found itself in the spotlight as the USD/JPY rate rose to 161.18 on Thursday, with the yen near its weakest level in four decades, fuelling speculation of intervention from Tokyo authorities. Finance Minister Satsuki Katayama said that authorities would respond appropriately to currency market developments at any time, reiterating previous warnings.
South Korea's Kospi continued its recovery from the historic circuit-breaker crash of early June, with Samsung Electronics and SK Hynix rebounding meaningfully through the week. The semiconductor sector globally found fresh tailwinds in AI-related spending and a constructive outlook for HBM chip demand. Hong Kong's Hang Seng recovered sharply on Friday after a bruising early part of the week, with Chinese technology names and financial stocks attracting bargain hunters. Mainland China's CSI 300 was the regional laggard, ending the week modestly lower amid concerns about domestic demand and the property sector.
Australia's S&P/ASX 200 outperformed regional peers, aided by strong commodity prices outside of crude oil and robust domestic bank earnings. Singapore's Straits Times Index held firm, reflecting the city-state's position as a key beneficiary of resumed maritime trade flows through the Strait of Hormuz. Taiwan's TWSE remained near record highs, propelled by TSMC's dominant position in advanced chip manufacturing and the broader semiconductor cycle.
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AMERICAN MARKETS — WEEKLY REVIEW
Wall Street's week was defined by a dramatic sectoral divergence: a spectacular surge in traditional blue-chip stocks and non-AI sectors contrasted with a sharp and painful correction in semiconductor and AI-related names, even as the major indices managed modest to solid weekly gains overall.
The Dow Jones Index surged 539 points or 1.03% on Thursday to close at 52,844. The Nasdaq 100 fell 0.8% while the S&P 500 was flat, as chipmakers fell for a second day as investors questioned whether AI optimism had pushed valuations beyond reasonable levels. A softer-than-expected June jobs report pushed back expectations of an imminent Fed hike. Apple gained 4.8%, while Visa and Walmart both rose around 3%. For the week, the S&P gained 1.8%, the Nasdaq added 2.1%, and the Dow rose 2%.
US equities delivered a mixed performance in the final trading session before the Independence Day break. The Dow Jones Industrial Average closed at a record high. The S&P 500 finished little changed. The Nasdaq Composite ended lower as weakness in semiconductor and AI-related stocks weighed on technology shares. Chipmakers including Nvidia, AMD, Broadcom, Micron, Intel, Applied Materials, Lam Research, and KLA came under pressure as investors reassessed valuations and future AI infrastructure spending.
Meanwhile, fresh US economic data kept attention focused on the Federal Reserve after June nonfarm payrolls increased by 57,000, well below market expectations, while the unemployment rate stood at 4.2% amid softer labour-force participation. The US stock market is closed on Friday, July 3, 2026, as the country observes the Independence Day holiday ahead of July 4, with trading resuming Monday, July 6.
The first half of 2026 was spectacular for US equities despite the Iran conflict. In the first six months of the year, the Dow climbed 8.9%, marking its best first-half performance since 2021. The broad market S&P 500 rose 9.6%, and the Nasdaq climbed 12.8%. The small-cap Russell 2000 surged nearly 22% to clinch its best first-half performance since 1991.
The week also brought notable corporate developments. On Wednesday, Meta stock surged after Bloomberg reported that the company planned to enter the cloud business and sell access to AI computing power. However, AI infrastructure companies CoreWeave and Nebius Group plummeted, helping drag the Nasdaq lower. Chipmakers also fell, with Sandisk, Micron, Applied Materials, and Lam Research all falling around 10% as investors took profits following a great run for chip stocks. The tech-heavy Nasdaq fell as investors dumped semiconductor names, taking profit after the swath of stocks surged more than 80% in the first half of 2026. Micron tumbled more than 10%, although it remains up more than 260% year to date.
Fed Chair Kevin Warsh delivered measured remarks at the European Central Bank conference in Portugal. While he didn't give hints about monetary policy for the upcoming meeting, he noted that "we've seen that prices are too high." He also stated that US inflation expectations had eased over the past month, signalling there was no urgency to raise interest rates. This was a critical comment for global markets: it effectively decoupled rate-hike fears from the current data environment and gave both bonds and equities room to breathe.
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CRUDE OIL — THE WEEK'S BIGGEST STORY
The crude oil market delivered the week's most consequential macro development for India, completing a journey that few analysts had dared to predict as recently as six weeks ago: a full round-trip back to pre-war price levels.
Brent crude oil prices dipped to nearly $70 a barrel on Thursday, a level last observed just before the US-Iran conflict erupted, as supply concerns continued to diminish and markets tracked peace negotiations. The benchmark fell 1.29% to $70.65 a barrel. West Texas Intermediate declined 1.44% to $67.59 per barrel. Both Brent and WTI climbed sharply during the four-month war, spiking as much as 70%, but those increases have since been reversed after Washington and Tehran agreed to a 60-day ceasefire and pursued a permanent peace accord.
The United Arab Emirates restored its exports to over 3.9 million barrels daily, pushing total daily Hormuz flows past 10 million barrels. This surge, combined with ongoing emergency reserve releases and ad hoc Saudi sales to Asia, created a market surplus. Meanwhile, upcoming peace talks in Qatar face delays due to the funeral of Iran's former Supreme Leader Ali Khamenei, which begins on July 4.
Following the latest drop, Brent prices are down more than 38% from their post-war peak of more than $126 a barrel on April 30. Brent futures stood at $70.82 per barrel, lower than at any point since February 27, the day before the war began. The slide came after Qatar said that US and Iranian officials had made "positive progress" in indirect talks aimed at resolving issues related to their memorandum of understanding on ending the war. US President Donald Trump also cast a positive light on the talks, saying "the denuclearisation of Iran is moving along well."
The US and Iran signed a ceasefire framework in mid-June that includes a 60-day truce and the agreed reopening of the Strait of Hormuz, a critical chokepoint whose disruption had pushed Brent above $120 per barrel earlier in the conflict. The US Energy Information Administration, in its Short-Term Energy Outlook, forecast Brent crude to average around $105 per barrel in June and July 2026, before falling below $80 per barrel in Q3 2026 and to approximately $70 per barrel by the end of the year.
For India, the significance of this week's crude oil developments is difficult to overstate. Crude oil was quoted at $71.68 per barrel on domestic tracking platforms, compared to the $98–126 range that defined the peak of the conflict between March and May 2026. This dramatic reduction directly eases India's import bill by tens of billions of dollars on an annualised basis, compresses retail inflation, narrows the current account deficit, and creates meaningful monetary policy space for the Reserve Bank of India. Domestic petrol remains at ₹111.21 per litre and diesel at ₹97.83 per litre in Mumbai — levels that could see downward revision if crude sustains these lower levels through July and August.
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GOLD AND SILVER IN INDIA
Precious metals had an intriguing week, with gold and silver prices in India declining from their conflict-era peaks even as international spot gold staged a modest recovery, reflecting the complex interplay between easing geopolitical risk premium and a strengthening rupee.
Today's gold price in India stands at ₹14,379 per gram for 24 karat gold (99.9% purity), ₹13,181 per gram for 22 karat gold (91.6% purity), and ₹10,785 per gram for 18 karat gold (75% purity). On a 10-gram basis, 24-carat gold translates to ₹1,43,790 per 10 grams — a meaningful correction from the all-time highs above ₹1,58,000–1,60,000 per 10 grams seen at the peak of geopolitical anxiety in May 2026.
The price of silver in India today is ₹250 per gram and ₹2,50,000 per kilogram. Silver has corrected more sharply than gold from its conflict-era highs, reflecting its dual character as both a precious and industrial metal — with the easing of supply-chain disruptions and a more optimistic global growth outlook both reducing the safe-haven premium and improving the industrial demand trajectory simultaneously.
International spot gold was trading near the $4,130–4,200 per ounce range this week, having retreated significantly from the $4,500–4,600 levels seen during the peak of Middle East tensions. The pullback reflects the partial unwinding of the geopolitical risk premium as the US-Iran ceasefire framework consolidated. Silver in global markets traded near $65–67 per ounce, down from its conflict-era peaks but finding support from improving industrial and solar energy demand signals.
Domestic gold prices in India remain structurally elevated compared to year-ago levels, supported by the cumulative effect of the rupee's depreciation over the past twelve months and sustained retail and investment demand. With the MCX gold August contract trading near ₹1,42,000–1,44,000 per 10 grams, the domestic market continues to track both international prices and the USD/INR rate closely. Analysts broadly expect gold to find durable support at the $4,000–4,100 per ounce level globally, with a sustained break of the US-Iran ceasefire being the main upside risk that could push prices back toward $4,500.
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CURRENCY MARKET — RUPEE AND KEY PAIRS
The Indian rupee had its best week in months, benefiting from the powerful macro tailwind of collapsing crude oil prices, improving sentiment around the India-US trade deal, and the RBI's ongoing forex swap facility that has been attracting fresh foreign currency inflows into the banking system.
The US Dollar is quoted at ₹95.15 against the rupee as of the latest available data from July 3, 2026 — a meaningful appreciation from the ₹96.57 year-high seen in May 2026, and approaching the ₹94.40 level seen during the prior week's close. The rupee's recovery from peak crisis levels of nearly ₹97 represents over 150–200 paise of appreciation in a matter of weeks — a significant move that directly reduces the cost of dollar-denominated imports, eases corporate hedging costs, and reduces the effective landed cost of crude oil and other commodities for Indian buyers.
Among other key currency pairs, from HDFC Bank's overseas treasury forex card rates published on July 3, 2026, the Euro traded in the range of ₹106.60–111.26 against the rupee. The British Pound traded between ₹123.70–130.70 against the rupee across buy and sell rates as of Thursday. The Japanese Yen, at 161.07 per US Dollar, implies an approximate rate of ₹0.5908 per yen — a weakened yen that reflects the Bank of Japan's cautious policy stance and the wide interest rate differential between Japan and the US. EUR/USD stood at 1.1453 and GBP/USD at 1.3373 in global markets as of the latest data, both firm against the dollar — suggesting the rupee's appreciation is primarily driven by India-specific factors (lower oil import bill, improved sentiment) rather than a broad dollar weakness.
The RBI's USD-INR forex swap facility, announced in early June, continues to underpin the currency by encouraging banks to bring in overseas dollar resources. With crude now below $72 and the RBI's $700 billion reserve buffer intact, analysts have begun revising their USD/INR year-end forecasts lower, with several major investment banks now projecting the rupee could consolidate in the ₹92–95 range by December 2026 if the Iran peace deal holds and oil remains near current levels.
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THE WEEK IN CONTEXT: FROM CRISIS TO RECOVERY
The past week marks a clear inflection point in India's macro narrative for 2026. When the US and Iran launched their military conflict in late February, Brent crude surged from approximately $70 to eventually breach $126 per barrel by late April — a move that compressed India's economic momentum, widened the current account deficit, weakened the rupee from ₹84 to nearly ₹97, and sent the Sensex plunging from its all-time high near 86,000 to the 73,000–74,000 zone by late May and early June.
The ceasefire framework signed on June 17, followed by the gradual reopening of the Strait of Hormuz, the resumption of UAE and Iranian exports, and the constructive technical discussions in Doha this week, have now essentially reversed the entire oil-price surge. Goldman Sachs cut its Q4 2026 Brent forecast to $80 per barrel from $90, and its Q4 2026 WTI forecast to $75 per barrel. The bank also noted a downside scenario in which Brent could fall to around $70 per barrel in late 2026 if supply recovery arrives ahead of its revised base case.
For India, this is as close to a clean external macro tailwind as the economy has seen in years. Lower oil reduces the import bill, narrows the current account deficit, cools inflation, strengthens the rupee, gives the RBI room to consider further rate support if needed, reduces fuel costs for industry and agriculture, and directly improves earnings visibility for a large swathe of the Nifty 50 — from paint companies and tyre manufacturers to airlines, logistics players, and petrochemical downstream producers.
The India-US trade framework — which reduced reciprocal tariffs on several Indian goods to 18% — adds a second structural tailwind, particularly for exporters in textiles, gems and jewellery, pharmaceuticals, and technology services. The combination of lower energy costs and improved market access to the world's largest economy creates, for the first time in 2026, a genuinely optimistic medium-term growth outlook for Indian corporate earnings.
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OUTLOOK FOR THE WEEK AHEAD
The key variable for the week beginning July 6 is the durability of the ceasefire framework amid the politically sensitive week of mourning following Khamenei's death and the transition to the new supreme leader Mojtaba Khamenei. Upcoming peace talks in Qatar face delays due to the funeral of Iran's former Supreme Leader Ali Khamenei, which begins on July 4. Markets will watch carefully for any signs of hardline retaliatory posturing from Iran's new leadership — or, alternatively, for signals that the new administration is prepared to formalise the peace framework on terms acceptable to Washington.
On the domestic front, the first-quarter FY27 earnings season gets underway in earnest from mid-July. With lower crude prices, a firmer rupee, and improved consumer sentiment, the setup for earnings surprises on the upside — particularly in banking, FMCG, autos, paints, and cement — is the most favourable it has been all year. The RBI's rate decision framework will also be reassessed in light of the dramatic change in the crude-inflation outlook, and markets may begin pricing in a potential October or December rate cut if data continues to improve.
For Nifty, the technical picture has improved meaningfully with Friday's midday prints above 24,361. A sustained weekly close above the 24,400–24,500 resistance band would represent a decisive breakout from the consolidation range and could target 25,000 in the weeks ahead. Conversely, any deterioration in Iran-related news — particularly around the new supreme leader's stance on the nuclear deal — could swiftly re-establish the geopolitical risk premium in oil, the rupee, and Indian equities.
The story of 2026 for Indian markets has been one of resilience tested to its limits and a recovery that is now, for the first time, resting on genuinely solid macro foundations rather than hope alone.
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*All data as of market close and midday readings on Friday, 3 July 2026. US markets are closed Friday in observance of Independence Day; US data reflects the Thursday, 2 July 2026 close. Asian market data reflects Thursday close and Friday morning trends. Gold and silver prices are as published on July 3, 2026. Currency rates reference HDFC Bank treasury card rates and market data published on July 3, 2026. Crude oil prices reference Brent futures as of July 2–3, 2026. All prices and data are indicative and sourced from published market data platforms. This article is for informational purposes only and does not constitute investment advice.*