Middle East Conflict Shakes Global Markets
Escalating tensions between Israel and Iran have sent shockwaves across global financial markets, pushing investors toward safe-haven assets and triggering sharp volatility. The latest Israeli strikes on Iran’s nuclear and military facilities have intensified fears of a broader regional conflict, fueling dramatic market reactions.
Brent crude prices surged over 14% intraday—hitting their highest levels since January—before cooling slightly but still closing up 7%, marking the biggest single-day jump since March 2022. The surge in oil prices directly impacted the Indian Rupee, which closed below the 86 mark against the U.S. Dollar, its sharpest fall in over a month. Heavy central bank intervention helped the Rupee recover from an intraday low of 86.20, but concerns persist due to India’s 90% dependency on imported crude.
Equity markets in India reflected the turmoil, with the Sensex dropping 573 points (0.70%) to 81,118.60 and the Nifty falling 169.60 points (0.68%) to 24,718.60, capping off a weekly decline of over 1%.
Gold, meanwhile, surged to record highs as investors sought safety. Domestic spot prices jumped ₹1,603 per 10 grams to ₹99,058. MCX futures for August briefly crossed ₹1,00,000 per 10 grams before settling at ₹98,392. Globally, gold approached its April high of $3,500 an ounce.
Bond markets also reacted, with yields on India’s 10-year benchmark government security rising 2 basis points to 6.30% amid inflation fears driven by soaring crude.
Internationally, U.S. markets mirrored the unease—Dow Jones shed over 495 points, and the S&P 500 dropped nearly 1%.
Iran condemned the Israeli strikes as a “declaration of war” and warned of a “decisive and proportional” response in a letter to the UN Security Council. Iran’s Nournews reported 78 killed and over 300 injured in Israeli attacks on residential areas in Tehran. The UNSC is set to convene an emergency session to address the intensifying crisis.
With geopolitical uncertainty looming large, markets remain on edge, highly sensitive to any further escalation in the region.
