Indian Shares Slump Amid Oil Price Surge

(RTTNews) - Indian shares slumped on Monday as rising oil prices added to inflation and interest-rate concerns.

Brent crude futures jumped over 3 percent toward $108 a barrel amid a lack of clarity related to U.S.-Iran peace negotiations.

After publicly rejecting Iran's latest proposal to reopen the Strait of Hormuz and other demands regarding naval blockades and easing economic measures, U.S. President Donald Trump reportedly told aides he expects U.S. bombing to resume after midterm elections.

Iran's Foreign Minister Abbas Araghchi expressed hopes for a diplomatic solution, but warned the country is prepared for war with the United States to resume.

"We are fully prepared for the war to be resumed. We stand firm in the face of any new aggression, even if it comes to a doomsday war," Araghchi told NBC News.

Surging oil prices and elevated bond yields added to worries that the U.S. Federal Reserve will continue raising interest rates next month.

Last week, several Federal Reserve officials flagged more tightening ahead, citing resilient economic growth and a strong labor market.

CME Group's FedWatch Tool currently indicates a 64.2 percent chance the Fed will raise borrowing costs by an additional 25 basis points at its late October meeting.

The benchmark 30-share BSE Sensex plunged 1,124.02 points, or 1.52 percent, to 72,771.72 while the NSE Nifty index dropped 360.25 points, or 1.56 percent, to 22,780.25.

The BSE mid-cap and small-cap indexes plummeted around 1.6 percent each.

The market breadth was extremely weak on the BSE, with 3,102 shares falling while 1,365 shares rose and 250 shares closed unchanged.

Among the prominent decliners, Trent, BEL, ICICI Bank, SBI, Reliance Industries, Hindustan Unilever, HDFC Bank, Adani Ports, Power Grid Corp and Larsen & Toubro fell 2-3 percent.