The is expected to rebound on Tuesday, 9 June, as tensions in the Middle East, which triggered a broad-based sell-off in Monday’s trade, eased after the Iranian military’s joint command reportedly said it was halting its offensive operations.
Israel and Iran exchanged fire early Monday in their first direct attacks since the US brokered a ceasefire with Tehran two months ago. Hours later, Iran’s military reportedly said it would halt offensive operations, though it warned that harsher attacks could follow if Israel resumed strikes on Lebanon.
The fragile ceasefire in West Asia has been tested multiple times, with Iran and the US-Israel alliance accusing each other of repeated violations, keeping crude oil prices highly volatile.
Although attacks have resumed several times during the ceasefire, US President Donald Trump and other top US officials have sounded optimistic about the possibility of a near-term peace deal that could end the three-month-long conflict, which has shaken the global economy, pushed energy prices sharply higher, and made essentials, including food, more expensive worldwide.
The statement from Iran came shortly after US President Donald Trump said in a post on Truth Social that both , adding that final negotiations on peace were underway.
“The blockade will remain in place and in full force and effect until a ‘Final Deal’ is reached. Things should move quickly,” he further said in the post.
According to Kranthi Bathini, equity strategist at Wealthmills Securities, there have been several statements from both sides, and the situation remains highly volatile, much like the stock market itself. However, he said the key factor that markets will closely watch is the movement in crude oil prices.
Bathini said that if crude oil prices decline following President Trump’s statements, the market is likely to react very positively. However, if crude prices fail to witness any meaningful correction, then markets, especially in the Indian context, are likely to treat such statements in a neutral manner.
He further noted that the movement in crude oil prices remains extremely crucial for Indian markets. While crude prices have reacted to Trump’s comments and moderated somewhat, Bathini said investors will now closely monitor whether prices continue to soften further, which could provide positive momentum for equities.
During the truce, Iran has maintained its stranglehold on the , a crucial passage for the world’s oil and natural gas, whose closure was the primary reason global fuel prices skyrocketed. Israel has continued to strike Hezbollah, Iran’s ally in Lebanon, and pushed deeper into that country.
And on Monday, Yemen’s Houthi rebels, another Iranian ally, fired at Israel and warned they would target Israel-affiliated ships in the Red Sea, AP reported.
Crude prices retreat sharply from day’s high
which had remained elevated earlier in the session, retreated sharply from the day’s highs following Iran’s statement, which eased concerns that any fresh escalation in the conflict could disrupt negotiations between Tehran and the US aimed at extending the ceasefire and gradually restoring oil exports through the Persian Gulf.
Brent crude oil futures eased to around $94 per barrel after hitting an intraday high of $98, while US crude futures dropped to $91 per barrel from the day’s high of $95.
Reduction in geopolitical risk could improve market sentiment, says analyst
The ceasefire headlines from West Asia could finally give Indian equities the breather they have been waiting for. Harshal Dasani, Business Head at INVasset PMS, said that in the last few hours, US President Donald Trump stated that Israel and Iran are looking at an immediate ceasefire, with negotiations on a broader peace arrangement underway. Iran has also indicated a halt to military operations for now, signalling a potential de-escalation after weeks of uncertainty.
According to Dasani, for Indian markets, the significance is less about geopolitics and more about the pressure points that could ease. He said the biggest overhang through June has been fears of a prolonged disruption in energy supply routes and a renewed spike in crude oil prices. If the ceasefire holds, the probability of a sustained crude oil shock declines materially, which could ease concerns around imported inflation, the rupee, and corporate margins, particularly for oil-sensitive sectors.
Dasani further noted that the timing is important as Indian equities have already underperformed several global peers this month, largely due to stretched valuations and cautious foreign investor flows. He said a reduction in geopolitical risk could trigger short covering and improve risk appetite. However, Dasani cautioned that this should not be mistaken for a structural change in the broader market trend, adding that markets still need earnings support and sustained liquidity to move higher.
On the near-term outlook, Dasani said the immediate reaction is likely to be constructive, especially for sectors linked to consumption, financials, and industrials. However, he added that the sustainability of any rally will depend on whether the ceasefire results in lower crude oil prices and a sustained easing of global risk aversion. For now, Dasani believes the development removes a key source of uncertainty, which alone could give bulls some breathing room after a difficult start to June.
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