The Indian equity benchmarks Sensex and Nifty have opened in the red on Thursday due to resurgent escalations between Iran and Israel over Lebanon. The BSE Sensex declined 950 points or more than 1.2 per cent, to 76,624.35, while the Nifty 50 shed 240 points or 1 per cent, to 23,759.45 in early trade.
The markets tanked despite the announcement of a ceasefire by the United States and Iran, mediated by Pakistan, on Wednesday morning.
The announcement had returned investor confidence in the markets, which rallied throughout the day’s business.
Global stock markets, including India's, came under pressure on Thursday, while oil prices surged in the initial hours as Israel began striking Lebanese cities, which, according to Iranian and Pakistani mediators, were included in the terms of the ceasefire.
Investors remained cautious as sporadic fighting continued in the Middle East, including Iranian strikes on Gulf States, and the Strait of Hormuz remained largely blocked.
MSCI’s Asia Pacific equity index fell 1 per cent, reversing part of the previous session’s sharp rally, after Iranian Parliament Speaker Mohammad-Bagher Ghalibaf said that three clauses of the ceasefire proposal had been breached so far.
Besides Asian markets, the North American and European markets are also down around 0.3 per cent as investors reassessed whether the ceasefire would hold.
Additionally, gold and silver prices have also come under pressure as a strong dollar and high-yielding treasury bonds kept investors hooked to the US treasuries rather than investing in precious metals and high-risk stocks. Besides, the investors are also focusing on defence and energy stocks to maximise their profits from the ongoing hostilities in the Middle East region.
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