HOW DID GLOBAL STOCK MARKETS REACT TO THE OUTBREAK AND CEASEFIRE ANNOUNCEMENTS OF IRAN ISRAEL USA WAR?

This paper aims to investigate the effect of instantaneous asset price effects for the four leading global equity indices, i.e., Nifty 50 (India), S&P 500 (US), FTSE 100 (UK) and Shanghai Composite (China) indices during the 2026 Iran-Israel-USA War, using the event study methodology. Using an event window of one day, the current research tries to uncover the asset price effects resulting from the announcements of the outbreak of war, intensification of the military action, and the ceasefires via the country level crude oil indices. It was found that there was asymmetry at the country level that resulted from the domestic reliance on the energy and the composition of the sectors. In the window of the initial conflict and escalation, developing countries that were net importers of oil suffered the most, where Nifty 50 experienced the largest fall of -3.26% on March 18 and -2.09% on March 26. However, the S&P 500 showed initial resilience (+0.68% on March 9); however, once the price of crude oil surged to the range of 70-75, all four indices experienced falls in their stock prices. The declared ceasefire on June 11 acted as the trigger of the market de-escalation mechanism, leading to the coordinated relief rallies of all four indices with Nifty 50 posting a rise of +2.16% and S&P 500 recording an increase of +1.76%. On the contrary, changes in the price of oil were influenced by the demand for recovery rather than the risks of shortages during the wartime. The market reaction to the executive digital messages in real-time provides a good basis for testing Semi-Strong Form of Efficient Market Hypothesis in presence of high geopolitical risks. All of these dates were retrieved from the tweets of the President of the United States of America, Donald Trump related to ceasefire and outbreak updates during the Iran-Israel-USA war.