Oil rose nearly 8% as worries about supply constraints in West Asia – the world’s top energy hub – lifted prices, underscoring India’s loss as a net importer.
The NSE Nifty fell 312.95 points, or 1.2%, to close at 24,865.70. The BSE Sensex fell 1048.34 points or 1.3% to end at 80,238.85.
“Markets are reacting to unprecedented geopolitical events in the Gulf,” said Nilesh Shah, MD, Kotak Asset Management.
“The road is concerned about the price as well as the availability of fuel and the safety and cash flow of our more than nine million citizens in West Asia,” Shah said.
Institutions The import bill may increase
Brent crude was near $79 a barrel on Monday after opening above $81 on Monday, with the clash closing the Strait of Hormuz – a key transit route for oil and gas off the coast of Iran. An Aramco refinery in Saudi Arabia was temporarily shut down after an Iranian drone attack on Monday. If the war continues, oil forecasters are not ruling out Brent at $100.
“Elevated West Asian risks increase the likelihood of a $100/bbl oil scenario, arguing for caution on risk assets and patience before near-term declines,” Barclays said in a client note on Monday.
According to media reports, US President Donald Trump expects the war to last about four weeks. The potential for prolonged conflict comes as a result of existing concerns about the emergence of AI-related disruptions and unpredictability in US tariff policy regarding the valuation of risk assets in emerging markets.
Higher oil prices are pushing up India’s import bills, putting pressure on the rupee. They simultaneously increase the risk of imported inflation, potentially limiting the policy space for India’s price-setting panel.
Foreign portfolio investors sold shares worth ₹ 3,295.64 crore on the first trading day of March after shifting buyers worth ₹ 19,782 crore in February.
