Trump’s Remarks Trigger Biggest Drop in India’s Stock Market in Three Months

Darwin, 11 July: India’s stock market suffered a major setback after a sudden rise in global crude oil prices. Tensions in the Middle East escalated after US President Donald Trump said that a peace deal with Iran was “over,” triggering a sharp increase in oil prices, weakening investor confidence and creating selling pressure in markets worldwide.

On Wednesday (July 8), India’s benchmark Nifty 50 index fell 2.12 percent to close at 23,882.5 points. At the same time, the BSE Sensex dropped nearly 1,680 points, or 2.15 percent, ending the day at 76,503.6 points. It was the biggest single-day decline for both indices in three months.

Following attacks by the United States on Iranian targets in response to a tanker attack in the Strait of Hormuz, Iran said it had launched strikes targeting US military facilities in Bahrain and Kuwait. The developments further intensified tensions in the Middle East, pushing Brent crude prices up by around 6.3 percent to nearly $79 per barrel.

The impact was felt across global markets. Europe’s Stoxx 600 index headed toward its worst trading day in three months, while most Asian stock markets also declined. US stock futures fell by nearly 1 percent.

The Indian rupee weakened by 0.62 percent against the US dollar. At the same time, a decline in government bond prices pushed the benchmark bond yield up by more than 7 basis points to 6.7692 percent.

As the world’s third-largest oil importer and consumer, India faces significant pressure from rising crude prices. Higher oil costs could increase import expenses, raise inflation risks and negatively affect economic growth.

Market analysts said renewed concerns over fuel supplies and oil prices could prompt foreign investors to resume selling Indian equities, potentially slowing the pace of market recovery.

On the day, shares in the financial and information technology sectors fell by 2.5 percent and 1.4 percent respectively. All 16 major sectors ended in losses. Small-cap and mid-cap indices also recorded significant declines.

Shares of oil marketing companies, paint manufacturers, airlines and tyre producers also suffered sharp losses due to concerns over reduced profits caused by higher crude oil prices.

Source: Reuters