Even as the US has begun enforcing a blockade in the Strait of Hormuz, disrupting crude supplies, the stock market could be in for a rally on Wednesday amid hopes of continued US-Iran discussions towards a peace agreement. This has kept Brent crude futures below the $100-a-barrel mark and is reflected in Gift Nifty, which was quoting 260.50 points, or 1.09 per cent higher, at 24,138.
US and Iranian negotiation teams will return to Islamabad later this week to resume peace talks, four sources familiar with the matter told Reuters. A report by CNN earlier suggested that US officials were deliberating the possibility of convening the in-person meeting with Iranian officials before the ceasefire expires on April 21. The final decision has not yet been taken, the report suggested.
Markets were shut on Tuesday on account of Dr Baba Saheb Ambedkar Jayanti holiday.
The US President Donald Trump had on Monday said: “We’ve been called by the other side and they want to make a deal very badly,” adding that: “We’ve been called this morning by the right people on Iran.”
Iran was in touch on Monday and wanted to make a deal, Reuters earlier reported the US President Donald Trump as saying, adding that he would not sanction any agreement allowing Tehran to have a nuclear weapon.
Besides, the US President Donald Trump in a social media post on Monday said: “34 Ships went through the Strait of Hormuz yesterday, which is by far the highest number since this foolish closure began.”
Choice Instituional Equities in a note said the probability of an immediate return to peak escalation has receded materially. The political architecture around the ceasefire makes re-escalation within the window structurally costly for all sides, each party has preserved its narrative of strength, reducing the incentive to restart hostilities unprovoked.
“A renewed escalation of comparable intensity appears unlikely. However, unless flows through the Strait of Hormuz gradually normalize, Brent futures may reprice higher to converge with the physical market, where prompt barrels are trading at a 30 per cent premium currently,”
Choice Instituional Equities said around 10 mb/d of crude supply, 10 per cent of global output, remains shut in and may take 3–6 months to ramp-up depending on timing of the resumption of the flow.
“Meanwhile, gas output may recover slower, keeping prices elevated. Importantly, the path back is not linear. Freight operators, Protection and Indemnity clubs and war-risk insurers will take time to formally reclassify Hormuz as a standard transit zone, keeping shipping costs and lead times elevated in the near term,” it said.
In a scenario where reopening is announced by the end of April with majority of the flows normalise by end-July, Brent is seen averaging $95 a barrel in April–June period, with $82 a barrel in FY27E.
“In the more adverse scenario where reopening is delayed until May and flows recover only by August – physical supply constraints could sustain stronger pricing, with Brent averaging USD110/b in April–June’26 and USD89/b in FY27E. In the most damaging scenario – where a prolonged stalemate leads to an extended standoff – Brent could average USD120/b in Apr–Jun’26, with FY27E averaging USD98/b,” Choice said.
Market outlook
On the technical side, said Angel One, Nifty managed to defend the short-term moving average of the 20 DEMA on Monday, with the recovery emerging precisely from this support.
Additionally, the index continued to hold above the bullish gap formed last week, which remains supportive for the bulls.
“A key observation in recent sessions is that intraday dips are being bought into, unlike the sharp sell-offs seen during March on negative news flows. Markets now appear to be absorbing geopolitical developments more efficiently, suggesting that unless there is a major escalation, reactions may remain measured. Considering the improving strength in broader markets, the overall bias remains cautiously positive,” Angel One said.
On Monday, the BSE Sensex fell 702.68 points or 0.91 per cent to close at 76,847.57. Nifty settled the day at 23,842.65, down 207.95 points or 0.86 per cent.
Angel One said the 23,600–23,500 zone on Nifty will continue to act as an important near-term support, coinciding with the 20 DEMA, followed by the bullish gap around 23,150, which serves as the next key support.
“On the upside, the 24,000–24,100 zone, which marks the 50 per cent retracement of the decline from the March swing high, is seen as an immediate resistance area. Beyond this, the 24,400–24,600 zone emerges as a strong resistance band, aligning with key medium-term moving averages (50–89 EMA) and the 61.8% retracement of the recent fall,” it said.
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