Indian stock market ended the week on a positive note, with Sensex and Nifty rising around 0.3% each after erasing a significant portion of their intraday gains on Friday, accompanying global peers amid rising hopes for the much-awaited conclusion of a peace deal between Iran and the US.

At close, Sensex was up 232 points at 75,415 while Nifty 50 was up around 65 points at 23,719. This comes after Sensex had soared to an intraday high of 75,811 and Nifty hit its day’s high at 23,836, before paring some gains.

Overall, this week, the Sensex gained nearly 200 points while the Nifty 50 rose around 76 points. The gains added over Rs 2.4 lakh crore to the total market capitalisation of all companies listed on BSE, pulling it up to Rs 463 lakh crore.

Zudio-parent Trent, Axis Bank, ICICI Bank, Asian Paints, HDFC Bank, Kotak Mahindra Bank, Bajaj Finserv and Hindustan Unilever shares jumped 1-3% to lead gains on Sensex. Sun Pharma, ITC, Power Grid, Bharat Electronics and Bharti Airtel shares meanwhile declined up to 3% to lead losses.

The positive sentiment in the market came even as India VIX, which measures volatility in markets, inched up slightly to 17.91. Broader markets underperformed benchmarks, with the Nifty Smallcap 100 index closing in the red with marginal losses. Nifty Midcap 100 index, meanwhile, closed in the green with marginal gains.

Sectorally, Nifty Private Bank and Nifty Financial Services surged more than 1% to lead gains. Bucking the trend, Nifty Pharma, Nifty Healthcare index and a few other sectoral indices declined more than 1%. Around 1,522 stocks declined on NSE, 1,748 advanced and 97 remained unchanged.

"Domestic markets traded with a mild positive bias, supported by buying at lower levels and moderately constructive global cues, expecting easing tensions in the Middle East. Globally, the AI investment theme remained the primary driver, while domestically, financial stocks led the gains, with selective interest in autos and consumption,” said Vinod Nair, Head of Research at Geojit Investments.

Overall, markets remain range-bound, with strong DII inflows cushioning the downside and persistent FII selling limiting the upside, the analyst added. “Market is in a buy-on-dips and sell-on-rallies pattern. A sustained uptrend will likely require geopolitical stability and softer oil prices, which would strengthen macro conditions and improve FII sentiment, especially as corporates head into a weak Q1FY27,” he said.

Rupee recovers sharply

Rupee sharply recovered on Friday, rising 63 paise to close at 95.73 against the US dollar. This comes after the Indian currency witnessed a free fall against the American greenback, scaling a fresh lifetime low near 97 before the RBI intervened with measures.

“The recovery in rupee is currently being driven more by profit booking and softer crude prices rather than any major structural reversal, though lower oil prices can continue to provide temporary relief to the currency,” said Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities.

FII selling continues

Foreign investors remained net sellers of Indian equities for the third consecutive session on Thursday, selling shares worth Rs 1,891 crore on Dalal Street, according to provisional data on NSE. Foreign investors have mostly remained bearish on Indian markets this month so far, remaining net sellers of Indian equities in 10 out of 14 sessions so far in May.

Global markets rise

Global markets recorded sharp gains, with Japan’s Nikkei jumping over 2% and Hong Kong’s Hang Seng gaining around 1%. China’s Shanghai Composite and South Korea’s Kospi also rose by up to 1% on Friday.

Wall Street ended higher yesterday, with Dow Jones hitting a fresh record high. Nasdaq and S&P 500 also closed in the green. European markets, meanwhile, moved in the green on Friday with marginal gains.

Bond yields cool down

Bond yields cooled down, falling below the multi-year highs that they hit earlier this week. The benchmark 10-year US Treasury yield declined to 4.55% while that on 2-year Treasury notes declined to 4.078%.

Falling bond yields typically make bonds less attractive to investors, which in turn can lead to some uptrend in equity markets.

Iran-US peace deal hopes

Global investor sentiment was boosted after US Secretary of State Marco Rubio said discussions to end the war could progress, eyeing help from Pakistani mediators to reach an agreement. "I believe the Pakistanis will be travelling to Tehran today. So hopefully that'll advance this further," Rubio told reporters.

However, both sides continue to remain stuck on Iran’s uranium stockpile and controls on the Strait of Hormuz. This comes as the ceasefire agreed on April 8 that halted the raging military operations continued to grow fragile, as leaders from Iran and US issued fresh threats. Tehran said it was reviewing US peace proposals but warned of a "forceful response" to any renewed attack. US President Donald Trump, meanwhile, warned on Wednesday that negotiations were on the “borderline” between a deal and renewed strikes.

Oil prices near $105/barrel

Oil prices rose on Friday, but remained around $105 per barrel. Brent crude futures gained around 2% to trade at $105 per barrel, while WTI Crude gained more than 1% to $98 per barrel in the afternoon.

(With inputs from agencies)