Markets set to celebrate Iran-Israel ceasefire

U.S. President Donald Trump announced on Monday a complete ceasefire between Israel and Iran, potentially ending the 12-day war. Global shares extended gains Tuesday, with Asia-Pacific markets rising following the ceasefire announcement.

Stocks rose and crude prices tumbled as markets breathed a sigh of relief that Iran’s retaliation—a strike on a U.S. airbase in Qatar that left no casualties—was more restrained than feared. Crude oil futures sold off sharply in response to the limited response from Iran. U.S. crude fell $5.33, or 7.22%, to close at $68.51 per barrel, while Brent crude dropped $5.53, or 7.18%, to settle at $71.48. Oil prices reached their lowest levels since Israel began bombing Iran on June 13.

The selloff in crude oil accelerated Tuesday after President Trump announced that Iran and Israel had agreed to a ceasefire, sending oil into a deeper dive as supply disruption concerns ebbed. Markets also rallied on the dovish commentary from the Federal Reserve. The dollar fell and stocks spiked into Monday’s close after Fed Vice Chair Michelle Bowman indicated support for rate cuts as early as July, citing concerns about the job market and the potential easing of tariff-related inflationary pressures.

The dollar continued its decline as geopolitical tensions subsided and expectations for rate cuts grew. Indian markets are demonstrating underlying market resilience, recovering 233 points from session lows to ultimately close down 140 points (0.56%) at 24,971. Despite the initial selling pressure, the index traded entirely within the previous session’srange and finished 32 points above its opening level. Mid-cap and small-cap indices defied the broader market decline. The primary trend remains bullish despite short-term consolidation in the Nifty. The recent low of 24,824 serves as an immediate support level, while the resistance level lies at 25,222. Indian markets are poised to surge as geopolitical uncertainties subside and the prospect of lower US interest rates in July emerges.

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Source: HDFC Securities Prime Research