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1 week ago
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Summary
Markets rode a wave of relief as a break in the US-Israel-Iran war softened crude oil prices and allayed fears of disaster. Indian stock market indices went up nearly 4% on Wednesday. But then, peace is easier sought than achieved.
The 14-day ceasefire between the US and Iran sprang Indian shares up on Wednesday, with both benchmark indices ending nearly 4% up, mirroring similar gains in other markets. US President Donald Trump’s earlier threat of wiping out a “whole civilization” and Tehran’s combative response had frayed investor nerves so badly that the relief felt palpable.
The news sent crude oil prices down 14% to under $95 a barrel even as the rupee strengthened against the dollar. Hopes of a lasting peace deal, however, shouldn’t get ahead of the facts. Truce talks are due to begin, but the stated positions of both sides suggest that peace is easier sought than achieved. The direction of stock prices will depend significantly on what happens next.
Iran still seems bent on retaining its uranium enrichment facilities and control of the Hormuz shipping passage, both of which may be deal-wreckers for the US; as reported, Iran also wants Israel to back off from Lebanon.
Since Tehran appears to see itself as the victor (just as Trump might see himself), what terms it may try to set for other oil producers in the Gulf also remain unclear. For now, though, we can all breathe a little easier. An all-out disaster has been averted.
English (US) ·