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Oil prices surge, Sensex tanks: Aftermath of Trump's warning to hit Iran ‘extremely hard’
While Trump said that the US military objectives would be completed “very shortly”, he also issued a fresh warning to Iran, threatening to hit “extremely hard”.
US President Donald Trump's fresh warning to Iran triggered a big meltdown in global markets, as oil prices jumped and stocks tumbled amid fears of the Iran-US war escalating even further.
In his prime time address to the US, Trump seemed to send mixed messages on the future of the war. While he said that the US military objectives would be completed “very shortly”, he also issued a fresh warning to Iran, threatening to hit “extremely hard” if no deal is made.
Trump's remarks were no help to eager investors who were hoping for a big signal of an imminent end to the military conflict with Iran.
Crude surges after Trump's speech
Oil prices climbed more than $5 after Trump's address, with Brent crude futures rising $6.33, or 6.3%, to $107.49 per barrel, and US West Texas Intermediate crude futures climbing to $5.28, or 5.3%, to $105.40 per barrel, according to a Reuters report.
Both benchmarks had fallen more than $1 before Trump's televised speech. According to analysts, markets are responding to the US President's unclear messaging on a possible ceasefire or diplomatic engagement with Iran.
The crude shock came after Trump asserted that the US doesn't need the Strait of Hormuz, the key waterway seeing a blockade since the beginning of the war. He instead called on countries that rely on the strait to protect it. “The countries of the world that do receive oil through the Hormuz Strait must take care of that passage. They must cherish it,” he said, adding, “They must grab it and cherish it.”
Indian markets tumble, Sensex tanks
The impact of Trump's fresh warning to Iran and indications of a prolonged war was also felt in India on Thursday as equity benchmark indices Sensex and Nifty declined 2 per cent in early trade.
The 30-share BSE Sensex plummeted by 1,433.72 points, or 1.96 per cent, to 71,700.60. The 50-share NSE Nifty dived 445.70 points, or 1.97 per cent, to 22,233.70 in the morning trade, news agency PTI reported.
Sun Pharmaceuticals, IndiGo, Adani Ports, Eternal, Larsen & Toubro, Asian Paints, NTPC, State Bank of India, Trent, Kotak Mahindra Bank, Axis Bank, and PowerGrid emerged as the major laggards as all Sensex firms traded lower.
Bitcoin drops
Bitcoin, which was said to have been navigating effects of the Iran-US war better than many other assets, also saw a drop on Thursday after Trump's speech. According to a Bloomberg report, Bitcoin dropped as much as 2.8% to below $66,300 as of 12:40 pm in Singapore and smaller tokens suffered even more, with Ether down as much as 4.7% and Solana falling as much as 5.1%.
“Stock and commodity markets continue to whipsaw according to Trump’s latest comments on geopolitical developments,” said Caroline Mauron, co-founder of Orbit Markets.
