US-Iran Tensions Send Indian Markets into Free Fall
The Indian equity markets suffered a severe sell-off on Wednesday morning, plummeting by nearly 700 points within minutes of the opening bell. The BSE Sensex dropped to 76,471, while the NSE Nifty 50 breached the psychological 24,000 threshold to trade at 23,858.
The market rout was primarily driven by the severe disruption in global oil markets, with Brent crude surging past $95 per barrel following reports of US military operations against Iranian targets. This has sparked fears of widespread inflation across heavily import-dependent economies like India and Kenya.
The conflict also threatens to disrupt the Strait of Hormuz, a critical maritime chokepoint responsible for a vast percentage of global crude shipments. As a result, investors are rapidly dumping government bonds, with the yield on the benchmark US 10-year Treasury note spiking to 4.81 percent, a multi-year high.