Indian Shares Slump As Investors Weigh Energy Risks

(RTTNews) - Indian shares tumbled on Wednesday as rising uncertainty in global trade and energy markets spooked investors.

After U.S. and Israeli forces attacked Iran, Tehran retaliated by striking U.S. embassies and threatening regional economies.

Shipping through the Strait of Hormuz was halted, quadrupling tanker costs and causing global air transport chaos.

Brent crude futures topped $83 a barrel as the conflict posed threats to energy infrastructure and commercial shipping in the Gulf.

The conflict widened, with Israel hitting targets in Lebanon, while Iran stepped up missile and drone attacks in the region, targeting Israel, Saudi Arabia, the United Arab Emirates, Oman and Bahrain.

Benchmark indexes Sensex and Nifty both fell nearly 2 percent in early trade before recouping some losses as Russia announced its preparedness to increase oil deliveries to China and India, if needed.

As the conflict threatens global fuel trade, U.S. President Donald Trump said the U.S. Navy 'will begin escorting' oil tankers through the Strait of Hormuz, a strategic waterway, if necessary.

Trump also said he had instructed officials to provide political risk insurance and financial guarantees at a reasonable cost to secure maritime trade passing through the Gulf, particularly energy shipments.

The benchmark BSE Sensex ended the session down 1,122.66 points, or 1.40 percent, at 79,116.19, after having hit a low of 78,443.20 earlier.

The broader NSE Nifty index hit an intraday low of 24,305.40 before settling down 385.20 points, or 1.55 percent, at 24,480.50.

The BSE mid-cap and small-cap indexes plunged 2.3 percent and 2.2 percent, respectively.

The market breadth was weak on the BSE, with 3,237 shares falling while 1,056 shares rose and 140 shares closed unchanged.

Among the prominent decliners, Tata Steel slumped 6.8 percent on expectations that global economic growth could slow down due to geopolitical tensions and rising energy costs.

Construction & engineering giant Larsen & Toubro, which has exposure to the Middle East, plummeted 4.5 percent.

Trent, Adani Ports, Mahindra & Mahindra, Hindustan Unilever, Kotak Mahindra Bank, Bajaj FinServ, IndiGo, NTPC, UltraTech Cement and Bajaj Finance gave up 2-3 percent.