Sensex Drops: The escalating conflict in the Middle East has had a ripple effect on global markets, with the Indian stock market facing a sharp downturn. Following the United States’ bombing of three key nuclear facilities in Iran—Fordow, Natanz, and Esfahan—the Sensex and Nifty plunged sharply in early trade on Monday.
The Sensex, which initially opened strong with a 500-point gain, soon reversed course and crashed by over 800 points. Similarly, the Nifty dropped by nearly 250 points, reflecting investor concerns over rising geopolitical tensions and their potential economic fallout. The market decline is also in line with a broader global sell-off triggered by the heightened crisis.
The U.S. airstrikes, carried out by bomber jets early Sunday, were a response to Iran’s refusal to enter negotiations over its nuclear program unless Israel halts its military actions. Satellite imagery released late Sunday confirmed visible damage to all three nuclear sites. While Iran has not officially commented, intelligence reports suggest that nuclear stockpiles may have been relocated prior to the attack.
Investors are especially alarmed by the threat to the global energy supply. Iran is the world’s ninth-largest oil producer and plays a crucial role in global oil logistics. Concerns are mounting that Iran could retaliate by closing the Strait of Hormuz, a strategic chokepoint through which about 20% of the world’s oil passes. Such a move could send global oil prices soaring.
Oil prices have already surged 2%—the highest jump since January—fueling worries about inflation and fiscal pressure. The Indian rupee also felt the heat, falling 17 paise to 86.72 against the US dollar as energy import costs are expected to rise.
Market analysts warn that continued instability in the Middle East could pose serious risks to emerging markets like India, especially through oil price shocks, currency volatility, and reduced investor confidence.
As tensions mount, all eyes are now on diplomatic responses from global powers to contain the crisis and stabilize markets.
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