The Indian stock market is expected to rebound on Tuesday, 9 June, as tensions in the Middle East, which triggered a broad-based sell-off in Monday’s trade, eased after the Iranian military’s joint command reportedly said it was halting its offensive operations.
Israel and Iran exchanged fire early Monday in their first direct attacks since the US brokered a ceasefire with Tehran two months ago. Hours later, Iran’s military reportedly said it would halt offensive operations, though it warned that harsher attacks could follow if Israel resumed strikes on Lebanon.
The fragile ceasefire in West Asia has been tested multiple times, with Iran and the US-Israel alliance accusing each other of repeated violations, keeping crude oil prices highly volatile.
Although attacks have resumed several times during the ceasefire, US President Donald Trump and other top US officials have sounded optimistic about the possibility of a near-term peace deal that could end the three-month-long conflict, which has shaken the global economy, pushed energy prices sharply higher, and made essentials, including food, more expensive worldwide.
The statement from Iran came shortly after US President Donald Trump said in a post on Truth Social that both Israel and Iran were looking at an immediate ceasefire, adding that final negotiations on peace were underway.
“The blockade will remain in place and in full force and effect until a ‘Final Deal’ is reached. Things should move quickly,” he further said in the post.
According to Kranthi Bathini, equity strategist at Wealthmills Securities, there have been several statements from both sides, and the situation remains highly volatile, much like the stock market itself. However, he said the key factor that markets will closely watch is the movement in crude oil prices.
Bathini said that if crude oil prices decline following President Trump’s statements, the market is likely to react very positively. However, if crude prices fail to witness any meaningful correction, then markets, especially in the Indian context, are likely to treat such statements in a neutral manner.
He further noted that the movement in crude oil prices remains extremely crucial for Indian markets. While crude prices have reacted to Trump’s comments and moderated somewhat, Bathini said investors will now closely monitor whether prices continue to soften further, which could provide positive momentum for equities.
During the truce, Iran has maintained its stranglehold on the Strait of Hormuz, a crucial passage for the world’s oil and natural gas, whose closure was the primary reason global fuel prices skyrocketed. Israel has continued to strike Hezbollah, Iran’s ally in Lebanon, and pushed deeper into that country.
And on Monday, Yemen’s Houthi rebels, another Iranian ally, fired at Israel and warned they would target Israel-affiliated ships in the Red Sea, AP reported.
Crude prices retreat sharply from day’s high
Crude oil prices, which had remained elevated earlier in the session, retreated sharply from the day’s highs following Iran’s statement, which eased concerns that any fresh escalation in the conflict could disrupt negotiations between Tehran and the US aimed at extending the ceasefire and gradually restoring oil exports through the Persian Gulf.
Brent crude oil futures eased to around $94 per barrel after hitting an intraday high of $98, while US crude futures dropped to $91 per barrel from the day’s high of $95.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
