Domestic equities started deep in the red on Monday, March 23, tracking weakness across global markets and extending their losing streak into a fifth straight week. The mood remained fragile as escalating tensions between the United States (US) and Iran continued to unsettle investors.
The benchmarks started with a huge gap-down and slid to their 11-month lows in early session. The BSE Sensex slipped as much as 1,555.62 points, or 2.08 per cent, to hit an intraday low at 72,977.34, while the NSE Nifty 50 tumbled up to 480 points, or 2.07 per cent, to touch the day's low at 22,634.55.
The immediate trigger of today's sell-off is the escalating exchange of threats between the US and Iran over the Strait of Hormuz, a narrow but important shipping route that carries roughly a fifth of the world’s oil supply. Any threat to this corridor tends to push crude oil prices higher and, in turn, raises concerns for economies like India that rely heavily on oil imports.
US President Donald Trump on Saturday warned that Washington would “obliterate” Iran’s power plants if Tehran did not fully reopen the Strait of Hormuz within 48 hours.
Iran responded with counter-threats, saying it would target energy infrastructure and desalination facilities across the Gulf if the US follows through on its warning.
Iranian Parliament Speaker Mohammad Bagher Ghalibaf said any strike on the country’s power plants would be “immediately” met with retaliatory action against energy and oil assets across the region.
“Critical infrastructure and energy and oil infrastructure throughout the region will be considered legitimate targets and irreversibly destroyed, and oil prices will rise for a long time,” Ghalibaf said in a post on X.
On Sunday, Ghalibaf expanded the warning to include financial players, saying holders of US Treasurys and those that “finance the US military budget” could be seen as legitimate targets, along with military bases.
This is a developing story...
