Trump eases Hormuz tension, and Indian markets erupt: Sensex up 553 points

Geopolitical developments around one of the world’s most critical oil chokepoints moved Indian markets on Wednesday. US President Donald Trump withdrew a proposed 20% transit fee on cargo passing through the Strait of Hormuz, replacing it with trade and investment agreements with Gulf countries. Market participants viewed the move as a positive development after concerns over higher shipping costs had weighed on sentiment, and Brent crude eased toward the $85-a-barrel mark following the announcement, though it remained elevated around $85.6 per barrel.

At the same time, the US announced a full blockade on ships travelling to and from Iranian ports or carrying Iranian cargo, while keeping the Strait of Hormuz open for all other maritime traffic. Iran responded by threatening to halt all energy exports from the Middle East, saying ‘the export of oil and gas from the region will be either for everyone or for no one.’ Separately, reports that Trump urged Israeli Prime Minister Benjamin Netanyahu to begin withdrawing Israeli forces from southern Syria and Lebanon added to hopes of diplomatic engagement in the region, though broader geopolitical uncertainty persists.

Against this backdrop, Dalal Street staged a sharp comeback, reversing the previous session’s losses. The BSE Sensex jumped 553 points to 77,603.57 in early trade, while the NSE Nifty gained 148.15 points to 24,198.40. The recovery came a day after the Sensex had dropped 561.46 points, or 0.72%, to close at 77,054.94, and the Nifty fell 158.95 points, or 0.66%, to settle at 24,052.05.

The rupee also strengthened by 5 paise to 96.11 against the US dollar in early trade, recovering after slipping to 96.16 in the previous session, with the dollar index down 0.11% at 100.81. Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said the currency is likely to trade in a 95.90-96.50 range in the near term.

The rally was reinforced by a broader Asian equities rebound after softer-than-expected US inflation data raised hopes that the Federal Reserve could adopt a less aggressive monetary policy stance, with MSCI’s Asia Pacific equities gauge climbing 2% and technology stocks leading the advance.

Technical analysts said the Nifty continues to hold above its key 23,900 support level, with the broader market bias remaining sideways to bullish in the near term.

Bombay Stock Exchange building at Dalal Street, Mumbai. Wikimedia Commons/by BSEINDIA (CC BY-SA 3.0).