Hope Amidst Hostility: Israel, Iran Ceasefire Possibility and Its Ripple Effects on Global and Indian Markets

A Possible Israel-Iran ceasefire may ease tensions, trigger short covering in Nifty 50, and impact US, Asian, and Indian markets during the monthly expiry

Probable Israel-Iran Ceasefire: A Geopolitical Ray of Hope with Strong Market Ripples

June 2025: The world may be witnessing a significant geopolitical turn as reports hint at a probable ceasefire between Israel and Iran brokered through backdoor diplomacy and UN mediation. The possibility of halting hostilities between two archrivals could not only save lives but also bring a sigh of relief to global financial markets battered by weeks of volatility

This development, especially if materialized before the monthly expiry of June derivatives, could create a massive short covering rally, particularly in Indian benchmark indices like Nifty 50, as well as affect the GIFT Nifty US equities and broader Asian markets

Let us dive into the potential marketwide and stock-specific impacts, analyze fundamentals and technicals, and uncover what traders and investors can expect next

The Global Context: Israel-Iran Conflict and Ceasefire Hopes

The Israel-Iran conflict intensified in early 2025, disrupting energy corridors and heightening fears of an all-out war in the Middle East. Crude oil spiked, equities dipped, and global investors rushed to safe havens like gold and the dollar

However, recent mediation efforts by European allies and the UN have reportedly pushed both sides closer to a temporary ceasefire agreement. This could

De-escalate military tension in the Gulf region
Ease crude oil supply fears
Bring risk appetite back into equity markets

Impact on US and Asian Markets

United States

The US markets have already begun showing signs of recovery as VIX dropped from 184 to 159 in the last two sessions. With the Fed maintaining a cautious stance on interest rates due to geopolitical uncertainty, any ceasefire announcement could result in

Sharp bounce in tech and energy stocks
A move higher in the SP 500 and NASDAQ
Increased capital inflow into equities from bonds

Asian Markets

Japan's Nikkei and South Korea's Kospi have shown mixed signals, weighed down by local inflation but supported by the weakening Dollar Index. A ceasefire can reverse this cautious tone and

Boost export-heavy stocks due to falling oil prices
Support risk sentiment across Asia Pacific

GIFT Nifty: The Leading Indicator for Indian Sentiment

The GIFT Nifty NSE I, X operating out of Gujarat International Finance Tec City, is a key overnight indicator of global sentiment toward Indian equities
Recent movements reflect heightened sensitivity to geopolitical developments. On June 24, 2025, GIFT Nifty surged approximately 200 points following the Israel-Iran ceasefire announcement, signaling a strong overnight recovery. It traded around 25164 early in the session, suggesting a positive open for the Nifty 50
A sharp decline in oil prices and easing volatility further support the view that GIFT Nifty could push above 25200, setting the stage for short covering in Indian index futures. That breakout is expected to align closely with expiry-related

Indian Stock Market Ready for a Relief Rally

Nifty 50 at Monthly Expiry Crossroads

The ceasefire may come just before the June FO expiry, where bears have built strong short positions expecting global tension to worsen

A peaceful breakthrough could lead to

Massive short covering
Volatility crush India VIX may fall below 12
Index heavyweight led rally toward 23200 to 23400

Top 10 Nifty Heavyweights Short Covering and Breakout Watch

Here is the updated list of top 10 Nifty 50 stocks with accurate fundamentals, technical,s and short covering potential

Reliance Industries Price 1456.35 Resistance 1480 to 1500 Fundamental Diversified retail telecom energy margin boost with lower oil Short Covering Potential High large FO shorts in energy segment

HDFC Bank Price 1948.40 Resistance 1980 support 1920 Fundamental Strong NIMs attractive valuations Short Covering Potential High built up post Fed caution

ICICI Bank Price 1419.60 Resistance 1438 support 1410 Fundamental Robust credit growth low NPAs Short Covering Potential Medium High futures options shorts

Infosys Price 1584.70 Resistance 1620 support 1550 Fundamental Stable digital services global demand easing Short Covering Potential Moderate options market interest

TCS Price 3393.40 Resistance 3450 support 3350 Fundamental Strong fundamentals low attrition Short Covering Potential Low Moderate defensive large cap

Larsen and Toubro Price 3583.70 Resistance 3700 support 3550 Fundamental Solid infra order book Middle East exposure Short Covering Potential High active short interest in futures

Hindustan Unilever Price 227510 Resistance 2310 support 2250 Fundamental Cost savings from lower commodity prices Short Covering Potential Low Moderate steady FMCG play

ITC Price 414.60 Resistance 420 support 410 Fundamental Strong FMCG Agri cash flows Short Covering Potential Medium FO expiry plays

Bharti Airtel Price 1936.05 Resistance 1950 support 1900 Fundamental ARPU growth telecom data demand Short Covering Potential Medium High expiry driven short setups

SBI Price 865 approx, Resistance 90,0 Support 840. Fundamental PSU revival treasury gains from lower yields, Short Covering Potential, High heavily shorted in futures

Technical Summary: Nifty and Bank Nifty

Nifty 50 Support 24900 and 24650 Resistance 25200 and 25450 SMA Trading above 50 DMA and 100 DMA indicating bullish trend continuation RSI Around 62 showing positive momentum without being overbought

Bank Nifty Support 52900, Resistance 53750, and 54400. Outlook: Higher beta index with potential for strong upside if geopolitical peace sustains, especially into expiry week

Sectoral Impact Overview

Sector Energy Impact Oil prices fall margin boost Likely Stocks Reliance ONGC

Sector Infra Capital Goods Impact Peace boosts ME investments Likely Stocks LT Siemens

Sector Banking Impact Bond yields fall, treasury gains, Likely Stocks SBI, HDFC Bank, Axis Bank

Sector IT Impact Dollar weakens stability helps Likely Stocks Infosys TCS

Sector FMCG Impact Input costs fall Likely Stocks HUL Dabur

Sector Auto Impact Crude drop supports margin Likely Stocks Tata Motors Maruti

What Should Traders and Investors Do

For Traders

Prepare for short covering rallies in Bank Nifty and stock-specific names
Track GIFT Nifty movement overnight
Watch for open interest unwinding in top FO contracts

For Investors

Rebalance towards quality large caps
Buy on dips if the ceasefire is confirmed and oil stays below 80
Focus on infra banking and energy sectors

Authors Note

Markets often overreact to fear and underprice the prospect of peace. A ceasefire in the Middle East may not end geopolitical instability, but it can trigger a reset in sentiment. Keep emotions aside, follow that, and look for fundamentals beyond the fog of war

Conclusion

While a permanent resolution between Israel and Iran remains distant, the possibility of a ceasefire can shift global and domestic markets from fear to optimism.m With the monthly expiry and heavy short positions, any positive geopolitical shift is likely to result in a strong rally, especially in Indian markets

As always, traders should stay cautious but alert. Peace may not only bring respite to civilians in conflict zones but also unlock new investment opportunities for those who stay grounded in facts and data

The Financial And Tech Literacy