Mumbai: Indian stocks and the rupee fell sharply on Wednesday after the United States carried out new strikes on Iran. President Donald Trump stated that the ceasefire in the Gulf conflict was over. Oil prices rose quickly, leading to a broad sell-off across markets. India’s Volatility Index jumped 26 percent, its largest single-day gain since March 23, showing higher investor caution. The rupee declined 60 paise against the dollar and finished as the weakest currency in Asia that day. Bond yields rose at their fastest pace in more than three months. The BSE Sensex dropped 1,677 points, or 2.15 percent, to close at 76,503.60, its biggest one-day fall since March 27. The Nifty 50 lost 517 points, or 2.12 percent, ending at 23,882.05, the largest daily decline since March 23. Analysts noted that the sudden rise in geopolitical tensions is likely to weigh on markets in the near to medium term. The rupee closed at 95.56 per dollar after opening weaker. Brent crude oil climbed toward 80 dollars per barrel. The Reserve Bank of India intervened to limit volatility. The 10-year government bond yield rose seven basis points to 6.76 percent, its sharpest increase since April 2. Reports indicated further possible strikes after Iranian attacks on US sites in the region. The US Treasury also ended a temporary waiver on Iranian oil sanctions. In other Asian markets, South Korea’s Kospi index fell more than 5 percent. In India, midcap and smallcap indices also declined. Foreign investors bought shares worth nearly 2,000 crore rupees on the day. Oil-related stocks such as HPCL, BPCL and Reliance Industries led the losses.
