Israel-Iran Clash Rattles Indian Economy: Crude Spikes, Markets Crash, Rupee Tumbles

Business News: As soon as the stock market took a turn in the morning, investors were shaken. Sensex fell by more than 1300 points and Nifty touched a low of 415 points. There was an atmosphere of restlessness everywhere; only red color screaming was visible on every screen. Billions of rupees evaporated—just like dreams break, silently and ruthlessly.

The stocks that were considered the safest till now were the first to collapse. There was chaos in brokerage houses; phones started ringing continuously and fingers started trembling on trading terminals. Small investors were nervous—like paper boats in a storm. This was not just an economic shock but a deep crack in the foundation of trust on which the middle class of the country was pinning its hopes.

Crude oil became more expensive

Israel's attack on Iran has increased the fear of disruption of oil supply in the Middle East. Brent crude prices reached $78.50 per barrel. This marks the highest point in the past two months. For India, which relies on imports for 85% of its oil consumption, the impact has been a severe economic blow. Now the government is bound to be under pressure of subsidy and the common man is bound to be hit by inflation. Oil companies are preparing to increase rates. Everything from transport to food items will be affected. If the rates of petrol and diesel rise, then a wave of inflation can spread across the country. And this can be just the beginning.

Another big blow from inflation: Gold at record level

People once again turned to gold for safe investment. In the domestic market, gold reached a record level of Rs 100,403 per 10 grams on MCX. In the month of June alone, gold prices have risen by more than Rs 4,500. This is a big concern for those households where a wedding or a big function is near. This is an emotional shock for women, whose hopes were raised by the fall in prices. Now buying jewelry is going out of the budget of ordinary families. Gold becoming expensive simply means fear has increased in the world. And when fear increases, investors rush towards gold.

Rupee crashes, dollar strengthens

On Friday, the rupee fell 56 paise to 86.08 against the dollar. The rupee came under significant strain as relentless foreign investor outflows combined with surging crude oil prices. Adding to the pressure, a strengthening dollar index further eroded the domestic currency's value. A weakening rupee means expensive imports from abroad and high inflation. India's trade deficit may increase further. Importing companies will have to bear a heavy cost burden. Due to this, mobiles, cars, and even medicines may become expensive. This decline is not just of the currency but also of confidence.

Stock market crash

The BSE Sensex fell 1337 points during trading to 80,354. Nifty also fell 415 points to 24,473. Experts believe that if this war drags on longer, the market may go down further. Aviation, auto, and paint sectors may be the most affected. Investors are suffering huge losses in their portfolios. There is tension in brokerage houses and there is silence on the trading floor. The IPO market is also expected to cool down. Mutual fund investors are also nervous. And this fall is not only of figures but of expectations.

Tension also increased in the bond market

The high price of crude oil also affected the government bond market. The yield reached a five-week high. Investors turned to safe havens, fearing rising inflation. The cost of government debt may also increase. The military conflict between Israel and Iran is not limited to borders. This crisis can also change the mood of global investment. FIIs may distance themselves from markets like India. The government may have to face new challenges in budget management. Banks' interest rates and cost of loans may be affected. And on every front, the common man's pocket is getting lighter.