Asian stock markets rallied broadly at Tuesday’s open, with investors reacting positively to an announcement from US President Donald Trump that Iran and Israel have agreed to a ceasefire.
This declaration, which suggests a potential de-escalation of the intense Middle East conflict, sent oil prices tumbling and provided a significant boost to equity market sentiment across the region, with Indian benchmarks like the Sensex expected to open higher.
The catalyst for the market’s upbeat mood was a post from President Trump on his Truth Social platform. “It has been fully agreed by and between Israel and Iran that there will be a Complete and Total CEASEFIRE … for 12 hours, at which point the War will be considered, ENDED!” Trump wrote.
This decisive statement, offering the prospect of an end to 12 days of turmoil, was exactly the kind of news investors had been hoping for.
However, it is important to note that, as of early Tuesday, neither Iran nor Israel had publicly confirmed their acceptance of President Trump’s stated ceasefire timeline, adding a degree of caution to the otherwise optimistic market reaction.
Regional bourses surge, oil prices retreat
The positive sentiment was evident across most major Asian stock exchanges.
Japan’s benchmark Nikkei 225 climbed an impressive 1.59%, while the broader Topix index rose 1.32%. South Korea’s Kospi jumped 2.09%, and the small-cap Kosdaq index rose 1.71%.
Over in Australia, the S&P/ASX 200 traded 0.69% higher.
In Greater China, Hong Kong’s Hang Seng index rose 1.38%, while mainland China’s CSI 300 was flat.
The most dramatic reaction to the ceasefire news was seen in the oil markets.
Prices fell sharply in early Asian trade as the immediate threat of a wider conflict and potential supply disruptions appeared to recede.
West Texas Intermediate (WTI) crude futures for August dropped by as much as 5.1 percent to $65.02 a barrel, slipping below levels last seen before the Israel-Iran conflict began on June 12.
Brent crude had also slid 8 percent overnight, partly in response to reports confirming that Iran’s earlier strikes on US bases in Qatar were coordinated and resulted in no casualties.
Indian markets set for higher open amid relief
Indian benchmark indices, the Nifty and Sensex, are expected to open higher on Tuesday, June 24, buoyed by the easing geopolitical tensions.
The announcement by President Trump has offered investors much-needed relief after a period of intense market volatility.
At about 7:30 am, Gift Nifty levels stood at 25,212, indicating a gain of 1 percent or 237 points and pointing to a strong start for the domestic bourses.
US markets react positively
US futures took another leg higher following President Trump’s ceasefire announcement.
Futures tied to the Dow Jones Industrial Average added 134 points, or 0.3%. S&P 500 futures gained 0.4%, while Nasdaq 100 futures rose 0.6%.
This followed a positive session on Wall Street overnight, where the three major averages had already closed higher.
Investors there had breathed a sigh of relief that Iran’s initial response to the US attacks over the weekend was more restrained than many had feared.
On Monday, the Dow Jones Industrial Average added 374.96 points, or 0.89%, to end at 42,581.78.
The S&P 500 gained 0.96% to close at 6,025.17, while the Nasdaq Composite climbed 0.94% and settled at 19,630.97.
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