3 min readMar 24, 2026 11:39 AM IST
The Indian stock market opened as much as 2% higher on Tuesday after US President Donald Trump’s sudden de-escalation of the war in West Asia, which also helped cool crude oil prices sharply.
Monday, Trump said on Truth Social that the US and Iran had held “very good and productive conversations” over the last two days regarding a “complete and total resolution” of hostilities. The talks, the US President said, would continue over the week. As such, the US was postponing previously-threatened strikes on Iranian power plants for five days. However, Iran denied any discussions had taken place.
Trump’s statement, though, was enough to provide relief to global financial markets and crude oil prices. However, investors remain cautious after the Wall Street Journal reported on Monday – after Trump’s post on the five-day delay – that American allies in the Persian Gulf are “inching toward joining the fight against Iran” after facing persistent attacks from Iran and the closure of the key waterway of the Strait of Hormuz. Consequently, global markets and crude oil erased gains.
The same seems to have happened in India on Tuesday, with the Sensex opening 2.1% higher before giving up more than half its gains. The Nifty, meanwhile, opened 1.6% above Monday’s close and was trading 0.7% up around 1045am. All the sectoral indices on the NSE gained, with 45 of the Nifty companies trading higher, led by a 3% gain in Apollo Hospitals Enterprise Limited and 2.7% rise in Kotak Mahindra Bank.
The rupee, which fell to a new record low of 93.97 per dollar on Monday, also opened higher on Tuesday at 93.63. However, at 93.85, it was trading dangerously close to the 94-per-dollar mark, suggesting the foreign exchange market remains far from optimistic about the war in West Asia, reflecting the movement in crude oil prices. Brent crude oil futures rose to $104 per barrel after dropping 11% on Monday on Trump’s announcement.
Meanwhile, the price of India’s crude oil basket is averaging $119.28 per barrel in March after spending almost the entirety of 2025-26 below $70 per barrel.
“We shift our baseline FY27E (FY27 estimate) forecast around a more realistic, yet manageable, Brent average of $80/bbl, with higher pressure in 1Q (April-June),” Emkay Global Financial Services’ economists said in a note on Tuesday. “Accordingly, we trim FY27E GDP growth by 0.4pp (40 basis points) to 6.6% and raise inflation and CAD/GDP to 4.3% and 1.7%, respectively. A more adverse terms-of-trade shock, with Brent above $100/bbl, could push CAD/GDP beyond 2.5% and drive a BoP deficit of ~$85 billion,” they added.
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