Asian Equities and Indian Indices Fall as Crude Tops $91 on Iran Tensions
Rising crude prices and a global bond sell-off are driving a sixth straight day of losses for Indian equities, amplifying inflation and currency risks across emerging markets.
Indian benchmark indices extended their losing streak on Tuesday, with the Sensex falling 0.63% to 77,235.46 and the Nifty 50 dropping 0.55% to 24,154.90. This marks a sixth consecutive session of losses as elevated crude oil prices and rising global bond yields weigh heavily on investor sentiment.
Brent crude climbed above $91 a barrel following the expiration of a temporary US-Iran ceasefire on Monday. With the US ruling out an extension and Tehran adopting a more aggressive military stance, supply concerns have pushed oil to its highest levels since late July.
"The sharp rise in crude prices has renewed concerns over India's inflation, the rupee and the current account," said Ajit Mishra, SVP of Research at Religare Broking. The rupee weakened to ₹95.68 per dollar, though Reserve Bank of India intervention helped limit the depreciation.
Negative sentiment spilled over into broader Asian markets on Wednesday, triggering a sharp sell-off in technology stocks. South Korea’s Kospi plunged 5.89% at the opening bell, dragging major semiconductor players like Samsung Electronics and SK Hynix down by 7.08% and 8.66%, respectively.
Japanese tech manufacturers also faced heavy pressure, with memory chipmaker Kioxia plunging 9.13% and SoftBank Group falling 5.44%. This regional weakness mirrored losses on Wall Street, where the Nasdaq Composite dropped 1.3% in the previous session amid a broader global bond sell-off.
Adding to market uncertainty, US President Donald Trump stated that no negotiations are currently underway with Iran, contradicting claims from Tehran regarding the closure of the Strait of Hormuz. In response to the diplomatic deadlock, Iraq’s cabinet approved a new three-month mechanism to export crude via multiple alternative routes starting September 1.
Gift Nifty futures pointed to another negative open for Indian indices, trading down 42.60 points at the 24,187 level. Meanwhile, safe-haven demand provided slight support to precious metals, with spot gold recovering 0.2% to $4,342.33 per ounce as US Treasury yields retreated from recent highs.
