US-Iran war: US President Donald Trump's remarks that the Iran war is "effectively over" have raised hopes of easing geopolitical tensions in the Middle East, potentially providing relief to global financial markets. The comments could influence investor sentiment towards riskier assets such as equities while also triggering volatility in traditional safe-haven investments such as gold and silver.
For Indian markets, any signs of de-escalation between the US and Iran could be positive, particularly if they lead to a sustained decline in crude oil prices. Lower oil prices could ease India's imported inflation concerns, support the rupee and improve the outlook for corporate earnings.
However, the impact on precious metals could be more complicated. While easing inflation concerns and expectations of lower interest rates could support bullion prices, a reduction in geopolitical uncertainty could also reduce demand for gold and silver as safe-haven assets.
According to market experts, Trump's remarks could provide a near-term boost to Indian equities by easing geopolitical uncertainty and improving global risk appetite. The prospect of reduced military tensions in the Middle East may encourage foreign institutional investors (FIIs) to return to emerging markets, including India, after periods of heightened volatility.
Mahesh M Ojha, VP Research & Business Development at Kantilal Chhaganlal Securities, said Trump's comments indicate that the ongoing war could be nearing an end, which may support positive sentiment in the Indian equity market in the near term.