Oil crashes, Nikkei jumps 5%: How US-Iran ceasefire flipped global markets

Asian markets opened sharply higher on Wednesday after news of a two-week ceasefire between the United States and Iran eased fears of a wider conflict. Oil prices dropped steeply, while investors moved towards safer assets like gold.

The development comes as both sides agreed to pause military action and allow limited navigation through the Strait of Hormuz, a key global oil route. The move has calmed energy markets and lifted investor sentiment across Asia.

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Japan’s Nikkei 225 led the gains, rising 5.28 per cent or 2,822.44 points. South Korea’s KOSPI climbed 5.61 per cent, adding 308.11 points. India’s GIFT NIFTY also surged more than 3 per cent to touch 23,841.00.

Other regional markets followed the trend. Hong Kong’s Hang Seng gained 3.04 per cent or 763.47 points, while Taiwan’s Weighted Index advanced 3.72 per cent, up by 1,234.69 points.

Oil falls sharply as Hormuz route reopens

Energy markets reacted strongly to the easing of tensions. Brent crude fell 13.04 per cent to USD 95.02 per barrel at 7:24 am IST. US crude declined 13.76 per cent to USD 97.41.

At the same time, gold prices rose by 100.45 points or 2.13 per cent, reflecting continued demand for safe-haven assets.

The breakthrough followed Iran’s acceptance of a peace proposal put forward by US President Donald Trump. The agreement includes a temporary halt in military operations and a two-week window for safe passage through the Strait of Hormuz.

Iran’s Foreign Minister Seyed Abbas Araghchi confirmed the decision in a post on X, outlining the country’s position.

“On behalf of the Islamic Republic of Iran, I express gratitude and appreciation for my dear brothers HE Prime Minister of Pakistan Sharif and HE Field Marshal Munir for their tireless efforts to end the war in the region. In response to the brotherly request of PM Sharif in his tweet, and considering the request by the U.S. for negotiations based on its 15-point proposal as well as announcement by POTUS about acceptance of the general framework of Iran’s 10-point proposal as a basis for negotiations, I hereby declare on behalf of Iran’s Supreme National Security Council: If attacks against Iran are halted, our Powerful Armed Forces will cease their defensive operations. For a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordination with Iran’s Armed Forces and with due consideration of technical limitations,” Araghchi wrote.

The pause is expected to open the door for broader talks between Washington and Tehran. A possible peace summit in Islamabad is also being discussed.

Earlier, Trump had announced a halt to US strikes, describing the two-week ceasefire as a step towards a longer-term agreement. He said Iran’s 10-point proposal could form the basis of future negotiations and added that US military objectives had largely been met.