Gold Surges, Oil Crashes: Global Markets React to Trump's Iran Ceasefire
Global markets experienced a dramatic shift following President Donald Trump's announcement of a two-week ceasefire between the United States and Iran. The truce, which includes Tehran's agreement to reopen the strategically vital Strait of Hormuz, has been widely viewed as a significant relief for the global economy.
The ceasefire creates an opportunity for both nations to negotiate a broader agreement to end the six-week conflict that has claimed thousands of lives and triggered a global energy crisis. The development is expected to ease concerns over oil and gas supplies, particularly for major Asian importers such as India, China, and South Korea.
Markets responded with a broad-based relief rally. Oil prices plunged dramatically, equities surged across the board, and the US dollar weakened sharply as investors reassessed the geopolitical landscape.
European and US equity futures rallied strongly, with S&P 500 futures rising over 2 percent and European futures gaining more than 4 percent. The dollar, which had served as a safe-haven during the conflict, declined across the board.
Asian markets joined the rally enthusiastically. Japan's Nikkei climbed nearly 5 percent, while South Korea's Kospi jumped 6 percent, triggering a trading halt. MSCI's broad Asia-Pacific index outside Japan rose about 4 percent.
Indian markets opened strongly, with the BSE Sensex surging 2,563 points, or 3.4 percent, to 77,178, while the Nifty 50 jumped 754 points to 23,877. Market breadth was firmly positive, with 2,534 stocks advancing compared to just 166 declining.
Crude oil posted its steepest fall in nearly six years following the ceasefire announcement. West Texas Intermediate dropped as much as 19 percent after Trump agreed to halt military action, while Brent crude declined sharply to around $95.96 per barrel. The move raised expectations of smoother oil flows through the Strait of Hormuz.
Gold prices rose to a near three-week high as investors reassessed risks. Spot gold gained 2.3 percent, after earlier rising more than 3 percent to its highest level since March 19. US gold futures also advanced strongly.
The Indian rupee opened nearly 40 paise stronger, trading at Rs 92.64 against the dollar compared with Rs 93 in the previous session. The dollar weakened to a one-month low, while major currencies strengthened. The yen, euro, and pound all gained notably in Asian trade.
US Treasury yields declined as lower oil prices boosted expectations that easing inflation could allow the Federal Reserve to cut rates. Two-year yields fell to 3.73 percent, while 10-year yields dropped to 4.25 percent.
Industrial metals advanced, with copper hitting a three-week high on improved risk sentiment and easing inflation concerns. Aluminum also gained, supported by reduced supply risks tied to Middle East tensions.
Bitcoin climbed to a three-week high as risk appetite returned, rising nearly 5 percent to above $72,700. Smaller cryptocurrencies also rallied, with Ether posting strong gains.
