Sensex crashes by 1,400 points, Nifty down 400 points as oil supply concerns top amid Hormuz tensions

NEW DELHI: Indian equity markets crashed on Monday morning after United States President Donald Trump announced a naval blockade of the Strait of Hormuz. The BSE Sensex stood at 76,135.92, marking a decline of 1,414.33 points, or 1.82 per cent, while the NSE Nifty 50 dropped 407.00 points to 23,643.60 at 9.15 am.

Markets showed a significant sell-off in key indices as global sentiment turned risk-averse following volatile negotiations between the US and Iran. The market reaction followed US President Donald Trump’s announcement to restrict access through the Strait of Hormuz.

Crude oil prices, which previously hovered between $94-100, surged back above $105 per barrel, reintroducing immediate inflationary concerns for the Indian economy. Indian rupee was down 66 paisa against US dollar at Rs 93.35 per USD.

Energy PSUs like Coal India stood at Rs 433.65, down by 0.10 per cent, NTPC stood at Rs 377.60, down by 0.67 per cent, while ONGC touched Rs 283.60, down by 1.01 per cent Tata Steel dropped to Rs 202.40 or (-2.04%) while JSW Steel stood at Rs 1,191.70, down by 1.90 per cent.

Ajay Bagga, a banking and market expert, said, “I would say we have to be very cautious about the Indian market. There might be a ‘Trump pump’ this evening because why would he post all this on Sunday? That was basically to make Asian markets panic and you could see a pivot before the US market opened when all shots were in place. You have to just wait and watch and conserve your capital. As retail investors, that’s the best we can do in this scenario. Banks are making solid money. Retail investors get butchered in this kind of a scenario. So stay away, is what I would say, from trading”.

Bagga highlighted that the shortage and the increase in prices would lead to global inflation and a slowdown in the economy. He observed that the rupee came under pressure because higher oil prices meant a higher current account deficit for the country.

Ajay Bagga further stated, “Last Wednesday there was hope in the markets that something was coming by, when the ceasefire and the talks were announced. But that momentum has faded. So we are again getting negative on the Indian markets and against the earnings driving the market, its geopolitical risk which will drive the markets. Because even over the weekend what was happening, if 40 people were asking for oil, only four were getting fulfilled. So what that is pointing out is that there is a shortage plus you are having to pay anything from $120 to $140 per barrel”.

Ponmudi R, CEO of Enrich Money, said, “Global sentiment has turned sharply risk-averse following a renewed escalation in geopolitical tensions. The earlier relief from the temporary US-Iran ceasefire has reversed, as reports indicate that the US has moved to restrict access through the Strait of Hormuz following failed negotiations”.

He highlighted that this development was critical, as the route carries a significant portion of global oil supply. “Crude oil prices, which had corrected from above $110 to the $94-100 range, have now surged back above $105, reintroducing inflationary and macro concerns”, Ponmudi said.

Experts noted that the rally in Indian equities seen last week remained at risk as markets shifted back into a risk-off mode. The Nifty 50 slipped below the critical 24,000 level, indicating a weak start driven by these renewed geopolitical concerns. (ANI)