The Indian stock market experienced a volatile trading session today, June 24, 2025, with the Sensex and Nifty 50 indices initially surging on news of a ceasefire agreement between Iran and Israel, only to erase most of their gains later in the day amidst reports of renewed conflict.
Early in the day, both indices rallied strongly, mirroring positive trends in Asian markets and overnight gains on Wall Street. The initial surge was fueled by optimism surrounding the announced ceasefire, with the Nifty 50 surpassing 25,200 and the Sensex rising over 900 points. This positive sentiment was driven by reports that US President Donald Trump had brokered a "complete and total ceasefire" between Iran and Israel, bringing an apparent end to their 12-day conflict.
However, the celebratory mood proved short-lived. Reports soon emerged that Israel accused Iran of violating the ceasefire and had ordered strikes on Tehran. This news triggered a wave of profit-booking, causing the indices to sharply reverse course. The Sensex plummeted over 1,100 points from its intraday high, while the Nifty 50 briefly dipped below the 25,000 mark.
The renewed tensions have introduced uncertainty into the market. The extent and duration of this impact will depend on how the situation evolves in the coming days and weeks. Investors are closely monitoring the geopolitical developments and their potential ramifications for the Indian economy.
The events highlight the sensitivity of the Indian stock market to geopolitical events, particularly those involving the Middle East. The region is a crucial source of crude oil for India, and any escalation in tensions can lead to a spike in oil prices, impacting India's import bill, inflation, and overall economic stability.
Despite the day's volatility, market experts suggest that the long-term impact of the Iran-Israel conflict on the Indian market may be limited. They point to the Indian economy's resilience and its ability to withstand external shocks. However, they also caution that a sustained period of high oil prices could pose challenges, potentially widening the current account deficit and putting pressure on the Indian rupee.
Traders also report increased freight costs and insurance costs which are impacting shipments to the Middle East.
