The Iran war continues, and the strategic Strait of Hormuz remains effectively blocked. Iranian forces reportedly attacked vessels carrying Iraqi crude again today, intensifying fears in global energy markets.
Diplomatic efforts to end the conflict are under way, but markets remain nervous. US futures are trading about 1 percent lower, while most Asian markets opened sharply in the red.
In derivatives trading at GIFT City, GIFT Nifty climbed to 23,900 on Wednesday night before falling to around 23,780 this morning, signalling a weak opening for the Indian market.
Crude oil prices are rising again. Brent Crude jumped about 5 percent on Wednesday to close at $91.98 a barrel and surged to around $98.74 this morning.
West Texas Intermediate crude climbed to about $93.15, while Murban Crude from the United Arab Emirates moved above $100, trading near $100.7 a barrel.
Despite the International Energy Agency announcing that 400 million barrels could be released from strategic reserves held by its 32 member countries, crude prices are still moving towards $100 a barrel.
Iran’s attacks on shipping in the Strait of Hormuz and reports of naval mines in the area have added to market fears. Statements from Donald Trump about retaliatory action and reopening the route have not reassured markets.
Global oil consumption is about 102.6 million barrels per day, while the IEA’s total emergency reserves stand at about 1.2 billion barrels. Analysts say these reserves may offer only limited relief if production and shipping disruptions continue.
Separately, the US has launched investigations under Section 301 against several countries, including India, a move that could eventually lead to higher tariffs. The probe, announced by the Office of the United States Trade Representative, also covers countries such as China, European Union members, Mexico, Japan, South Korea, Vietnam, Malaysia, Thailand, Bangladesh, Indonesia, Singapore, Cambodia and Taiwan.
Amid the conflict escalation, Iranian President Masoud Pezeshkian has proposed three conditions to end the war, raising hopes of back-channel diplomacy:
Recognition of Iran’s rights
Compensation for war damages
Assurances that Iran will not be attacked again in the future
In a social media post, Pezeshkian said Russia and Pakistan are involved in diplomatic efforts to mediate the conflict.
US markets opened higher on Wednesday but later slipped sharply as uncertainty over the war and rising oil prices weighed on sentiment.
Dow Jones Industrial Average fell 289.24 points (0.61 percent) to close at 47,417.27
S&P 500 declined 5.68 points (0.08 percent) to 6,775.80
Nasdaq Composite rose 19.03 points (0.08 percent) to end at 22,716.14
US futures were sharply lower this morning:
Dow futures down 469 points (0.99 percent)
S&P futures down 60 points (0.89 percent)
Nasdaq futures down 234 points (0.92 percent)
European markets closed with significant losses on Wednesday.
Asian markets also opened lower today. Japan’s Nikkei 225 dropped about 1.6 percent, Australia’s S&P/ASX 200 fell 1.4 percent and South Korea’s KOSPI slipped 0.75 percent. Markets in Hong Kong and China also opened in the red.
With hopes of an early end to the war fading and crude prices rising, the Indian stock market fell to its lowest level in 10 months on Wednesday.
Restrictions on cooking gas and natural gas supply in India have disrupted hotels and several industries, while trade flows have become more difficult.
The BSE Sensex has fallen 10.8 percent from its January peak, entering correction territory. The Nifty 50, down 9.5 percent from its high, is also nearing a correction.
A meaningful recovery will likely depend on either easing geopolitical tensions or a fall in crude oil prices.
Pharma, healthcare and oil-and-gas stocks were the only sectors that avoided losses on Wednesday. Auto, banking and financial stocks saw the sharpest declines.
Sensex fell 1,342.27 points (1.72 percent) to 76,863.71
Nifty 50 dropped 394.75 points (1.63 percent) to 23,866.85
Nifty Bank declined 1,215.08 points (2.13 percent) to 55,735.75
Nifty Midcap 100 fell 716.55 points (1.25 percent) to 56,461.10
Nifty Smallcap 100 slipped 58.95 points (0.36 percent) to 16,414.85
Market breadth remained weak. On the BSE, 1,850 stocks rose while 2,423 declined. On the NSE, 1,237 stocks gained while 1,863 fell.
Foreign institutional investors continued to sell. FIIs recorded net sales of ₹6,267.31 crore in the cash market on Wednesday, while domestic institutional investors bought shares worth ₹4,965.53 crore.
Gold prices are trending lower. Spot gold moved between $5,124 and $5,224 on Wednesday before closing at $5,177.20 an ounce. It slipped to about $5,144 this morning before recovering slightly to $5,158.
Rising crude prices and fears that prolonged conflict could push up inflation and interest rates are weighing on gold.
Silver touched $89.54 an ounce yesterday before closing at $85.87. It was trading around $85.68 this morning.
Platinum: $2,166
Palladium: $1,627
Rhodium: $11,000
In Kerala, 22-carat gold rose ₹240 on Wednesday to ₹1,19,320 per sovereign.
On the Multi Commodity Exchange of India, 24-carat gold closed at ₹1,61,967 per 10 grams, while silver ended at ₹2,69,211 per kilogram.
Rubber prices in international markets rose 1.01 percent on Wednesday to 199.20 cents per kilogram. Synthetic rubber prices slipped 0.22 percent to 15,241.67 yuan per tonne.
Cocoa prices reached $3,429.21 per tonne. Tea prices remained unchanged, while coffee fell 3.18 percent. Palm oil declined to 4,408 Malaysian ringgit per tonne.
Prices of polyethylene, polypropylene and PVC rose by up to 5.7 percent. Urea and diammonium phosphate moved only marginally.
The rise in crude oil prices strengthened the US dollar. The US Dollar Index rose to 99.23 on Wednesday and climbed further to about 99.52 this morning.
Euro slipped to $1.1548
Pound declined to $1.3391
Japanese yen weakened to 159.03 per dollar
Chinese yuan strengthened to 6.87 per dollar
The yield on the US 10-year Treasury rose to 4.23 percent, reflecting expectations of higher inflation and interest rates.
The Indian rupee weakened further on Wednesday. The dollar rose 24 paise to close at ₹92.04.
In the offshore non-deliverable forwards (NDF) market, the dollar climbed to ₹92.20 last night and was trading around ₹92.24 this morning.
The Chinese yuan strengthened to ₹13.44, while the euro rose to about ₹106.50. These movements may influence currency trading in India today.
Cryptocurrencies continue to remain volatile.
Bitcoin was trading above $70,200 this morning
Ethereum was above $2,050
Solana was trading above $86
(March 11, Wednesday)
Sensex: 76,863.71 (−1.72 percent)
Nifty 50: 23,866.85 (−1.63 percent)
Bank Nifty: 55,735.75 (−2.13 percent)
Midcap 100: 56,461.10 (−1.25 percent)
Smallcap 100: 16,414.85 (−0.36 percent)
Dow Jones: 47,417.27 (−0.61 percent)
S&P 500: 6,775.80 (−0.08 percent)
Nasdaq: 22,716.14 (+0.08 percent)
Dollar: ₹92.04 (+₹0.24)
Gold (ounce): $5,177.20 (−$15.1)
Gold (sovereign): ₹1,19,320 (+₹240)
Brent crude: $91.98 (+$3.88)