Crude shock for D-Street on fresh US-Iran tensions

Indian equity markets faced a significant downturn on Thursday, driven by escalating tensions between the US and Iran, which pushed Brent crude prices over $71 per barrel. The NSE's Nifty index fell by 365 points (1.4%) to close at 25,454.35, while the BSE's Sensex dropped 1,236.11 points (1.5%) to settle at 82,498.14. Market analysts, including Pankaj Pandey from ICICI Direct, have expressed concerns regarding the persistence of these geopolitical tensions and their potential impact on the Indian economy, which relies heavily on oil imports. With the Indian rupee depreciating against the US dollar and crude prices surging, there are fears of increased imported inflation. The market's volatility index (VIX) rose over 10%, indicating heightened risk perception among traders. The situation is compounded by Iran's recent military exercises, which temporarily closed the Strait of Hormuz, a crucial route for global oil shipments. The broader market also saw declines, with all sectoral indices on the NSE finishing lower. Meanwhile, gold and silver prices experienced slight increases, as investors sought safe-haven assets amid the uncertainty. Internationally, markets in Japan and South Korea showed positive movements, contrasting with the downturn in Indian indices.