Investors reacted positively when the Asian stock market opened on Tuesday, following an announcement by US President Donald Trump confirming that Iran and Israel had agreed to a truce.
The oil price fell and the equity markets in the Middle East were boosted by this declaration. Indian benchmarks such as the Sensex are expected to start higher.
A post by President Trump to his Truth Social page was the catalyst that sparked a positive market mood. Trump said that Israel and Iran had agreed to a complete and total CEASEFIRE for 12 hours. At this point, the war will be considered over.
Investors had hoped for a statement that would end the 12 day turmoil.
It is also important to remember that as early as Tuesday morning, neither Iran or Israel publicly acknowledged their agreement with President Trump’s ceasefire timetable. This adds a level of caution to an otherwise positive market response.
Regional bourses surge, oil prices retreat
Positive sentiments were evident on most Asian stock exchanges.
The Nikkei 225, Japan’s leading index, rose by an impressive 1,59%. Meanwhile the Topix Index rose by 1.32%. South Korea’s Kospi index jumped by 2.09% and the Kosdaq small-cap index grew by 1.71%.
In Australia, S&P/ASX 200 was up 0.69%.
Hong Kong’s Hang Seng Index rose 1.38% in Greater China while the CSI 300 index on mainland China was flat.
Oil markets reacted most dramatically to the news of the ceasefire.
Early Asian trade prices fell as the threat of wider conflict, and possible supply disruptions seemed to diminish.
West Texas Intermediate crude futures (WTI) for August fell by up to 5.1 percent, falling below the levels seen just before Israel and Iran conflict started on June 12th.
Brent crude also fell 8 percent over night, in part due to news reports that confirmed the coordinated nature of Iran’s previous strikes against US bases in Qatar.
Indian markets set for higher open amid relief
The Nifty and Sensex are likely to start higher on June 24 due to the easing of geopolitical tensions.
After a long period of market turmoil, the announcement made by President Trump provided investors with much needed relief.
Gift Nifty was at 25,212 levels around 7:30am, which is a 1 percent gain or 237 point and indicates a good start for domestic exchanges.
US Markets React Positively
The US futures market rose again after President Trump announced a ceasefire.
Dow Jones Industrial Average futures gained 134 points (0.3%). S&P futures increased by 0.4% while Nasdaq futures increased 0.6%.
The session was preceded by a strong Wall Street session overnight. All three of the major averages closed at higher levels.
The investors in the region breathed a huge sigh after learning that Iran’s response to US strikes over the weekend had been more measured than they had anticipated.
The Dow Jones Industrial Average ended Monday at 42,581.78 after adding 374.96 or 0.89% points.
The S&P 500 closed at 6,025.17 after a gain of 0.96%, and the Nasdaq Composite rose 0.94% to 19,630.97.
This original article appeared originally on ICD.
