War has erupted in the Middle East, and the stock market has seen a massive selloff. As soon as the market opened, Sensex and Nifty fell by more than 1.3%. Sensex fell 1,200 points, while Nifty was trading around 24,840, down 300 points. Bank Nifty fell 795 points. Midcap Select also fell 250 points.
What happened between Iran, Israel and the United States?
Over the weekend, the US and Israel jointly launched a major military attack on Iran, quickly turning the situation into a war. In return, Iran targeted US military bases in eight countries in the Middle East, including the UAE, Qatar, Kuwait and Bahrain. There were reports of the death of many big leaders including Iran’s Supreme Leader Ayatollah Ali Khamenei, after which Alireza Arafi was made the interim Supreme Leader and he has warned of revenge. Amid rising tensions, Iran closed the Strait of Hormuz, the world’s vital oil supply route, sending crude prices rising nearly 8% to an eight-month high above $81.
Weakness in global market, trend towards safe haven
Global signals looked weak on Monday due to the impact of the war. Nifty was trading around 25,230, down nearly 110 points, while Dow futures fell 350 points and Japan’s Nikkei index fell nearly 600 points. Following the Iraqi attacks, UAE stock markets were closed for two days. Meanwhile, investors turned to safe haven assets, leading to a sharp gain of almost $135 on COMEX gold, pushing prices above $5,380. Silver also rose almost 3% to cross $96.
