Hormuz Truce Sends Shockwaves Through Global Markets: Oil Crashes 14%, Sensex Soars 2,800 Points

Global markets responded swiftly on Wednesday after US President Donald Trump announced a two-week ceasefire with Iran, contingent on the immediate and safe reopening of the Strait of Hormuz.

Oil prices tumbled sharply within minutes of the announcement. Brent crude fell $14.84, or 13.6%, to $94.43 a barrel, while WTI slid $16.13, or 14.3%, to $96.82, pushing both benchmarks below the $100 mark for the first time in weeks. Equity markets moved in the opposite direction, with stocks jumping on the news.

The development brought some relief after weeks of intense market volatility and geopolitical tension, which had escalated sharply following US and Israeli strikes on Iran in late February. Tehran had responded by effectively choking off the Strait of Hormuz, sending energy markets into a tailspin.

Indian Markets Surge Sharply

Reacting to the news, Indian equities staged a dramatic recovery. The Sensex rallied over 2,800 points to an intraday high of 77,456, while the Nifty50 gained over 800 points to trade above 23,950. The single-session surge added nearly ₹15 lakh crore to the total market capitalisation of BSE-listed companies, taking the cumulative figure to ₹444 lakh crore.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the ceasefire had "dramatically altered the near-term market scenario."

"The crash in Brent crude to $95 following the ceasefire will again turn the market bullish. This ceasefire, particularly the agreed reopening of the Hormuz Strait, will embolden the bulls to charge again, aided by fair market valuations," he said.

RBI Policy Adds Tailwind

The ceasefire coincided with the Reserve Bank of India's Monetary Policy Committee announcing its policy decision. Vijayakumar noted the timing was unforseen. "The policy stance will continue to be neutral. The upside risk to inflation and the downside risk to growth can now be managed well. Rupee will strengthen and this may even force FPIs to turn buyers; at least they will have to cease the sustained selling, which will become irrational in the present context," he said.

On near-term market outlook, Vijayakumar was unambiguous. "Nifty will open gap up sharply and short covering can sustain the rally. In the near-term, Nifty will cruise towards 24,000 and further movements will depend on the evolving outlook. In brief, it is risk on again," he said.

He identified key sectoral beneficiaries of the shift. He said crude-linked plays like refineries and aviation, capital goods companies with Gulf exposure, and paints and adhesives are sectors with the potential to "stage a dramatic recovery."