As Middle-east tensions escalate, Sensex and Nifty fall while oil and gold rise.
Red Arrows, Pointing Up: Indian shares and oil markets were in the red today on account of the delicate situation the Middle-east. Sensex and Nifty ended the day trading 1.90% and 1.91% lower.
The Rupee hit its lowest point in almost two months, falling beyond ?72 to a US dollar, and oil prices surged more than 2%.
Gold prices surged to new highs. On MCX, February gold futures surged 2.3% or ?918 to a record high of ?41,030 per 10gm. On Friday, gold prices had surged over 2% or ?850 per 10gm. Livemint
Shares in oil marketing and refining firms fell on fears of falling margins due to the surge in crude prices. Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd fell 1%-4.7%. Reuters
Why the Worry?: The US recently conducted an air strike in Iraq that killed Iranian General Qassem Suleimani, widely seen as the second-most powerful man in Iran. This set off a series of events that further deteriorated US-Iran relations and increased the prospects of an all-out military confrontation.
Meanwhile, the Iraqi Parliament voted in favour of expelling all US troops from the country. This provoked US President Donald Trump to threaten the second-largest oil producer in OPEC with sanctions.
All these factors have increased uncertainty about the region's fragile political and economic set-up. And this in turn is hurting India, which is the world's third-largest oil consumer. Fears of supply disruption and soaring oil prices could hurt India's economic recovery, as it battles an economic slowdown that has plagued virtually all sectors of its economy.
Hand-curated Business News from Top Publishers & Platforms, Richly Crafted to Fit into One Wholesome Email. Subscribe Now to receive a nuanced 360 Degree account of key events from the World of Business and Finance every day.