Trump delays Iran strike, markets rally only 1%
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- Donald Trump postponed his threat to bomb Iranian power plants by five days and claimed the US and Iran held “very good and productive” talks with “major points of agreement” to end the conflict that began on Feb 28.
- Iran denied any negotiations were underway, accusing Trump of false statements to calm energy markets while Iranian officials pledged to keep fighting.
- Nifty rose only 1% on Tuesday, well below the 3‑4% rally indicated by GIFT Nifty’s Monday evening levels after Trump’s initial comments.
- Brent crude jumped 4% to $104 /barrel, erasing Monday’s 10% crash as traders debated the authenticity of the diplomatic claims.
- Seshadri Sen of Emkay Global said the probability of peace is “significantly elevated,” expects Brent to fall to $75‑80 per barrel, and noted the Nifty had dropped 5% over the last three sessions amid $2.5 billion of foreign outflows.
- Dr. VK Vijayakumar of Geojit Investments observed the market pricing in a war end, highlighted August US oil futures at $80, warned of “excessive volatility” from war news, and said the rupee must stabilize before broader market steadiness.
- Iran later acknowledged attempts at diplomacy through mediators, adding further uncertainty for investors assessing India’s oil‑import‑heavy economy.
Why it matters: Investors in India’s oil‑heavy economy see only a 1% index rise and $2.5 bn foreign outflows, while oil prices rebound to $104, indicating that Trump's diplomatic narrative failed to restore confidence, keeping the rupee weak and prompting continued FII selling in the near term.
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