Top News

The United States (US) and Iran are set to finalising a peace deal on June 19 in Switzerland, bringing sigh of relief to markets globally. India's stock markets have begin to show the positive response to the development as Sensex gained over 1100 points to begin the day.

Reacting to the positive news on the US Iran War, crude oil prices eased further with the US crude oil futures for July delivery were down 4.85% at $80.76 per barrel while Brent futures, the international benchmark, for August delivery traded about 4.35% lower to $83.51.

Indian rupee opened sharply higher gaining 43 paise to 94.68 against the US dollar compared to Friday's close of 95.11.

Analysts believed that the easing crude oil prices will further bring more relief for the Indian Rupee and ease country's import bill and current account.

 

With the easing tensions in the Middle East region, the key gainer will be oil sector. Global oil market expert, Peter McGuire, CEO, Trading.com, Australia told Timesnownews.com that the announcement of the US-Iran peace deal is, " a big positive for energy markets and on the geopolitical front. This is a big win, let us see how the rest of the week unfolds. However Netanyahu's move and the choices he makes remain a major concern. If the peace deal continues, believe energy prices will be much cheaper and Brent Crude could even fall below 70 dollars a barrel."

FMCG giants have raised prices by up to 11% due to the war amid rising crude oil prices, and elevated freight rates. For the sector, analysts believe that Indian consumers hoping for cheaper packaged foods, soaps and paints may have to wait much longer.

Further, the falling crude oil prices is set to help Rupee recover against US Dollar.

Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities said, "the oil equation is now turning in India's favour. If the Hormuz agreement holds — and this morning's developments suggest it will — and Brent moves down towards $70–73, that materially eases our import bill and current account, which only amplifies the inflow story. Alongside this, we expect flows into the equity segment to improve as global risk sentiment recovers."

"This is a decisively positive setup for the rupee. Over the next one to two weeks, we expect it to strengthen towards 94, and a decisive break of that level would open the door to 93, and potentially 92.5, over the following 2-3 months. For now, 94 is the key level to watch, and below that, 93," Banerjee added.

The continuous uptick in Indian Rupee against the US Dollar might look like a distant development happening in the macro economy, but it has a large impact on the day-to-day life of the citizens.

This increases immediate dollar liquidity in the forex market, helping reduce panic demand for dollars when the rupee is under pressure.

Since the outbreak of the Iran War on February 28, India's foreign exchange reserves have declined by nearly $38 billion, dropping from an all-time high of $ 728.5 billion in February to roughly $691 billion in late May.