US-Iran Ceasefire Helps Indian Markets Recover 65% Of Losses Since War

Indian markets rejoiced as Donald Trump announced a two-week "double-sided" ceasefire with Iran. As per the agreement, the US would halt strikes on Iran for two weeks. Meanwhile, Iran would allow vessels through the critical Strait of Hormuz.   

The development turned investors optimistic and their optimism reflected in numbers as Sensex opened over 2,500 higher on Wednesday. Within two hours, Sensex and Nifty zoomed over 3.5 per cent each. Investors added Rs 15 lakh crore in the total market capitalisation of all BSE Sensex companies in just an hour. Follow Live Updates

The day helped Indian equity benchmarks erase about 65 per cent of losses it incurred since the fresh conflict in Iran began on February 28. 

Market Rebound After Iran War Pause

Recovery from War Sell-off

• Drop from pre-war to trough: 46,325,200.41 − 41,155,003.15 = 5,170,197.26
• Recovery by April 8: 44,513,654 − 41,155,003.15 = 3,358,650.85
• Recovery as % of loss: 3,358,650.85 / 5,170,197.26 × 100 = 65%

Why Markets Rallied Today

1) Diplomatic Breakthrough: Donald Trump announced a "double-sided ceasefire" with Iran that pauses hostilities for 14 days. The potential reopening of the Strait of Hormuz eased fears of long-term disruption to oil flows. 

2) Sharp Oil Price Drop: Brent crude plunged nearly 14 per cent on the ceasefire news. Crude fell below $95 a barrel in early trade. Lower oil prices reduce inflation risk in India. This lifts corporate earnings forecasts and valuation multiples.

3) Global Risk Appetite Returns: Asian, US and European risk assets rallied on the easing of geopolitical risk. Futures markets indicated strong global buying interest before Indian open. 

Sector & Secondary Impacts

Oil-Sensitive Stocks: Lower crude prices meant big gains in sectors that benefit from cheaper energy: Paints, tyres, OMCs surged on price action. 

Currency & Bonds: Indian rupee strengthened with oil dropping and risk sentiment improving. Bond yields eased as pressure from energy-linked inflation expectations subsided. 

If the ceasefire extends or the Strait of Hormuz stays open, sentiment could sustain. Conversely, if the ceasefire is merely procedural, volatility may return.