In a post on Truth Social, Trump said that the US and Iran have had very good and productive conversations over the last two days regarding the “complete and total resolution” of the rising hostilities in the Middle East. He added that the talks will continue throughout the week, and the halt in military strikes is subject to the success of the ongoing meetings and discussions.
Gift Nifty sharply surged 3.6% to 23,275 in the post market hours of Monday, following Trump’s announcements, after escalations in the war between Iran and US-Israel led to a massive selloff earlier during the day.
The sharp surge in GIFT Nifty comes along with a sharp drop in oil futures after Trump’s announcement. Brent crude futures tumbled nearly 8% to trade at $103 per barrel on Monday evening, after a sharp surge in the morning.
“I am pleased to report that the United States of America, and the country of Iran, have had, over the last two days, very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East. Based on the tenor and tone of these in depth, detailed, and constructive conversations, which will continue throughout the week, I have instructed the Department of War to postpone any and all military strikes against Iranian power plants and energy infrastructure for a five day period, subject to the success of the ongoing meetings and discussions,” he said.
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The reversal in GIFT Nifty seems to be triggered by expectations of a ceasefire to the raging war in the oil-rich Middle East that has sparked a mind-boggling rally in oil prices, pushing them near $119 per barrel last week.
As a result of the investor optimism, Wall Street futures surged sharply, indicating a gap-up opening for the American stock markets. Dow Jones Industrial Average futures jumped nearly 3% or over 1,000 points. Nasdaq and S&P 500 futures also jumped nearly 3%.Vinod Nair, Head of Research at Geojit Investments, had said earlier during the day that the ongoing risk-averse sentiment will continue in markets until there is greater clarity on de-escalation, though the correction is offering selective long-term opportunities for investors.
Sensex crashed more than 1,800 points to close below 72,700, and Nifty 50 plunged over 600 points to 22,513, wiping off more than Rs 14 lakh crore from the total market capitalisation of all companies listed on BSE on Monday.
This followed Trump’s earlier statement, in which, he set a Monday deadline for Iran, warning that the US can strike Iran’s power plants unless Tehran fully reopens the Strait of Hormuz within 48 hours. In response, Iran warned it would target energy and water infrastructure across the Gulf if the US follows through on its threat.