Indian equity benchmarks opened in the red on Thursday amid rising crude oil prices and the closure of the Strait of Hormuz after fresh military exchanges between the US and Iran for the second consecutive day. BSE Sensex dropped around 300 points while the Nifty 50 declined around 100 points in early trade as uncertainty continued in the Middle East.
Indian shares slumped in pre-open trade, signalling a volatile start for the benchmark indices. Nifty was trading 0.7 per cent lower, the Sensex retracted 0.4 per cent, and GIFT Nifty futures were down 0.6 per cent.
The spike in oil prices due to escalating tensions in the Middle East and a broader sell-off in global equities added to the pressure.
Stronger-than-expected US consumer inflation data has also reinforced expectations that the Federal Reserve may keep interest rates elevated for longer, potentially delaying any policy easing until 2027. Higher interest rates typically push investors away from emerging markets such as India towards safer dollar-denominated assets.
Foreign investors have already dumped billions of rupees in the Indian market amid the ongoing geopolitical tensions.
Investor sentiment turned cautious after Iran announced the complete closure of the Strait of Hormuz following fresh US strikes, raising fears of major oil supply disruptions through one of the world’s most critical energy routes.
Meanwhile, gold prices have also fallen for the second consecutive week amid mixed global economic developments.
The price of 24-carat gold dropped Rs 10 in early trade on Thursday, with ten grams of the precious metal trading at Rs 148,850.
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