Indian Shares Set To Rally As Crude Oil Prices Crash On US-Iran Truce

(RTTNews) - Indian shares are likely to open on an upbeat note on Wednesday after the U.S. and Iran agreed to a two-week ceasefire, contingent on reopening the Strait of Hormuz, sending oil prices crashing.

The ceasefire calls for Israel and Hezbollah to halt fighting in Lebanon, while U.S. President Donald Trump said he was holding off on his threatened attacks on Iranian bridges and power plants.

The two-week ceasefire plan includes allowing both Iran and Oman to charge fees on ships transiting through the Strait of Hormuz.

Trump said a 10-point proposal received from Iran is a workable basis on which to negotiate.

Iran's Supreme National Security Council said negotiations with U.S. representatives will begin in Islamabad on Friday and could last up to 15 days under Pakistan's mediation.

Meanwhile, the Reserve Bank of India (RBI) will announce it latest monetary policy decision today, with economists expecting no change in interest rates at a time of heightened global uncertainty and rising inflationary pressures.

Benchmark indexes Sensex and Nifty surged around 0.7 percent each on Tuesday to extend gains for a fourth consecutive session, with information technology stocks leading the surge.

The rupee gained 9 paise to close at 92.98 against the dollar, rising for a third consecutive day, reflecting unwinding of lender positions in overseas markets.

Foreign institutional investors net sold shares worth Rs 8,692 crore on Tuesday, while domestic institutional investors net bought shares to the extent of Rs 7,980 crore, according to provisional exchange data.

Asian markets were sharply higher this morning, with benchmark indexes in Japan and South Korea surging 5-6 percent.

The dollar weakened significantly against major currencies, lifting gold prices more than 2 percent above $4,800 an ounce.

Brent crude prices sank 13 percent to $95 a barrel and WTI crude futures were down 15 percent below $97 a barrel.

U.S. stocks reversed losses to end narrowly mixed overnight amid ceasefire hopes after Pakistani Prime Minister Shehbaz Sharif urged President Donald Trump to extend his deadline for Iran to reopen the Strait of Hormuz by two weeks to "allow diplomacy to run its course."

Adding to hopes of a diplomatic breakthrough, the White House told Axios that Trump is "aware" of Pakistan's two-week Iran cease-fire proposal and that "a response will come."

Earlier in the day, Trump threatened that a "whole civilization will die tonight" if Iran fails to meet his latest deadline to strike a deal. Hours before the ceasefire deadline, Iran's key oil export hub, was hit by multiple strikes.

In economic news, short-term inflation expectations for U.S. consumers rose to 3.4 percent in March, while households grew more pessimistic about their financial situations, a New York Fed survey revealed.

The tech-heavy Nasdaq Composite and the S&P 500 both edged up by 0.1 percent while the Dow dipped 0.2 percent.

European stocks ended deep in the red on Tuesday as traders returned to their desks after Good Friday and Easter holidays.

The pan-European Stoxx Europe 600 fell 1 percent. The German DAX tumbled 1.1 percent, France's CAC 40 shed 0.7 percent and the U.K.'s FTSE 100 gave up 0.8 percent.