Ceasefire Hopes Fuel Oil Slump and Equity Rally

Mr. Devarsh Vakil, Head of Prime Research, HDFC Securities

President Trump announced that the U.S. and Iran are in active negotiations, with reports of a 15-point peace plan and a potential one-month ceasefire.

Oil prices fell, while Bullion prices moved sharply higher as Bond yields and the Dollar index fell following an unconfirmed report hinting at a potential one-month ceasefire between the U.S. and Iran.

Tehran announced it will allow "non-hostile" oil vessels to pass through the crucial Strait of Hormuz.

The tentative signs of a diplomatic solution came despite new violence, with an Iranian missile causing injuries in Israel, which in turn pressed on multiple fronts and vowed to seize control of a strip of southern Lebanon.

Asia-Pacific markets surged, with Japan's Nikkei 225 climbing 2.5% and South Korea's KOSPI jumping 3%, leading regional gains. U.S. equity futures also ticked higher, with Dow futures rising 318 points overnight.

US President Donald Trump and Prime Minister Narendra Modi underscored the importance of keeping the Strait of Hormuz open for global trade during a call to discuss the situation in West Asia.

Nifty staged a relief rally yesterday, surging 445 points (2%) to close at 22,957. The rupee clawed back slightly, gaining 10 paise to end around 93.87/$ after Monday's record low near 94. Nifty faces stiff resistance at 23,378, with support clustered near 22,600.

Indian markets are poised to open 1% higher amid hopes of a de-escalation in the Middle East.

Source : Equity Bulls

Keywords

HDFCSecurities CeasefireHopes OilSlump EquityRally US Iran Conflict Nifty Sensex