Pulse of the Street: markets log modest weekly gains, but Iran tensions keep sentiment fragile

Subscribe to enjoy similar stories.Renewed hostilities near the Strait of Hormuz sparked a choppy retreat in domestic equities, even as favourable state-election outcomes provided a brief cushion to markets this week. Benchmark indices fell about 0.6% on Friday amid a global risk-off mood, as Iran accused the US of breaching their ceasefire agreement, citing attacks on its oil tankers and air strikes on coastal areas.But markets ultimately eked out marginal weekly gains, though the underlying sentiment remained fragile and directionless.

The Nifty 50 rose 0.74% to close at 24,176.15 and the Sensex ended 0.54% higher at 77,328.19.Experts warn that persistent geopolitical uncertainty, coupled with volatility in the rupee and crude oil prices, will continue to weigh on investor sentiment, tethering markets to their current range. Currently Brent crude trades at $100.26 per barrel, while the rupee is pegged at 94.39 against the US dollar.“The tug-of-war seen this week where positive state election outcomes were neutralized by geopolitical noise could continue,” said Gurmeet Singh Chawla, managing director at brokerage Master Portfolio Services.

“Until there is either a credible ceasefire or crude prices correct meaningfully, the index is unlikely to make a decisive directional move.”However, Chawla notes that even if the West Asia war subsides, a breakout rally is unlikely in the near term, as a sustained revival in foreign portfolio investor (FPI) inflows remains elusive. “For FPI flows to meaningfully reverse, India needs to have a stable currency and a visible valuation gap versus peers,” Chawla said.FPIs have withdrawn nearly ₹2 trillion from domestic markets over the first four months of 2026, in favour of burgeoning