Sensex, Nifty crash as Iran-Israel conflict unnerves investors
The rising tensions between Israel and Iran have rattled the Indian markets, leading to a sharp decline today. At the time of writing, the BSE Sensex had dropped by over 930 points, and the Nifty fell by nearly 300 points. This broad-based selling across multiple sectors is mainly due to worries about how the Middle East conflict could affect oil prices and global trade.
India VIX jumps to 13, highlighting increased market volatility
The Sensex and Nifty have tumbled over 1%, wiping out ₹5.63 lakh crore in market capitalization. Reliance Industries, HDFC Bank, ICICI Bank, M&M, L&T, and Bharti Airtel led the decline, while JSW Steel and Tata Steel bucked the trend. The Nifty Oil & Gas index dropped over 1.2%, with Hindustan Petroleum, IOC, and GSPL as top laggards. The fear gauge India VIX surged 8.9% to 13.06, reflecting rising investor anxiety over the escalating Iran-Israel conflict.
Market strategist's view on the situation
Dr. V K Vijayakumar, the Chief Investment Strategist at Geojit Financial Services, said "The hallmark of a bull market is its ability to climb all walls of worries." Even with the Middle East situation getting worse, he pointed out that this bull market is still going strong. However, he did caution that if Israel goes after Iran's oil installations, it could lead to a big jump in crude prices, which would be bad news for oil-importing countries like India.
Israel-Iran conflict intensifies with missile attacks
The conflict between Israel and Iran took a serious turn when Iran fired nearly 200 missiles into Israel on Tuesday, following Israeli airstrikes in Lebanon that killed Hezbollah's leader Hassan Nasrallah. Israeli Prime Minister Benjamin Netanyahu has promised to retaliate for these attacks. Meanwhile, reports indicate that Israel is gearing up for a major counterstrike within days, which could hit oil production facilities inside Iran. This potential escalation has raised worries about its effect on global markets and trade.
International response to the Israel-Iran conflict
US President Joe Biden has voiced his support for Israel after the missile attack, while French President Emmanuel Macron has reiterated France's commitment to Israel's protection. On its part, India has expressed deep concern over the escalating security situation in the Middle East and called for restraint by all parties involved. Despite these global reactions, fears of a wider war continue to grow as both Israel and the United States have pledged retaliation against Tehran.
