Brent Crude Reaches Near $97 Amid West Asia Tensions and US Rate Concerns
Indian markets opened in the red on September 7 as Brent Crude neared $97 amid heightened geopolitical tensions in West Asia and concerns over US interest rates. The BSE Sensex fell by 107.38 points or 0.14% to stand at 76,408.05 points, while the NSE Nifty 50 traded at 23,883.15 points, down 14.55 points or 0.06%. Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, noted that Brent Crude was trading near $96.50 after a rise of about 10% last week.
Banerjee added that the weekend's developments added a new dimension to the conflict, with it now being fought at sea. The US struck three Iranian oil tankers anchored off Iran's coast in response to Tehran firing ballistic missiles at American warships, including an aircraft carrier. Iran's Revolutionary Guard claimed attacks on three tankers using what it called an unauthorized route through the strait, along with US-affiliated vessels.
Banerjee noted that Iran's top security official said Tehran will declare a restricted zone in the coming days, beginning at the US naval blockade line and extending into the Gulf. Any ship entering this zone would be placed on Iran's sanctions list, while also announcing that the transit corridor agreed with Oman will be signed shortly, with its entry and exit points under Iranian control.
The surge in crude prices compounds pressure on domestic equities, with GIFT Nifty trading at 23,950.00 points, lower by 60.00 points, indicating persistent caution across morning trades. Rajesh Palviya, Head of Research at Axis Direct said that the near-term bias remains cautious, with the index struggling below the crucial 24,000-24,150 zone.
Vikram Kasat, Chief Business Officer, Advisory and Dealing at PL Capital, noted that weak Wall Street cues, fear of rate hike in US and uncertainty in Middle East may lead to some more consolidation in the stocks when markets open for trade on Monday. For the next couple of weeks participants may watch out for SEBI's review of CAS closing, FED meet outcome and developments in the Middle East.