Trump Declares US-Iran Deal Complete; Markets Surge

President Donald Trump announced on social media that a deal with the Islamic Republic of Iran is complete, authorising the toll-free opening of the Strait of Hormuz and the immediate removal of the United States naval blockade. The post ended with the words: Ships of the World, start your engines. Let the oil flow.

The announcement sent shockwaves through global financial markets. Oil prices collapsed, Asian equities surged and Indian stocks extended their recent recovery as investors rapidly repriced geopolitical risk across every major asset class.

Oil Prices Collapse

The Strait of Hormuz carries roughly a fifth of the world's oil and gas exports. Its closure since late February had been the single biggest driver of the energy price surge that pushed inflation higher across the globe. With the blockade now being lifted:

• Brent crude futures for August delivery fell approximately 4% to $83.77 a barrel.

• US crude futures for July delivery dropped 4.77% to $80.83 a barrel.

The declines represent a reversal from the highs seen during the conflict.

Indian Markets Rally

Indian equities had already begun pricing in a more favourable outcome ahead of the formal announcement. As of 10:02 AM on Monday, the Nifty 50 was up 1.45% at 23,964 and the BSE Sensex had added 1.54% to 76,679.37, extending Friday's sharp gains into the new week.

The rupee strengthened to 94.45 against the US dollar, easing the import cost pressure that had weighed on corporate margins through the conflict period. India's 10-year government bond yield slid to its lowest level since 25 March, reflecting a broad improvement in risk sentiment and expectations of easing inflation pressure.

Asian markets Rally

Asian markets rallied strongly following the development. South Korea's Kospi surged 5.1%. Japan's Nikkei 225 gained 3.6%, while the broader Topix index rose 2.6%.

Australian shares also moved higher. The S&P/ASX 200 added 1.3%.

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Gold Also Moves

Spot gold prices rose nearly 2.58% to $4,327 per ounce, reflecting a mix of lingering uncertainty about the deal's implementation and a general uptick in risk appetite that supported the metal even as oil and defensive plays sold off.

Sources:

CNBC

Times of India

Reuters