Sensex falls 1,122 points as Operation Epic Fury drives crude surge and global selloff

by Hansraj Agrawal | Mar 4, 2026 | Business

Fears of rising crude oil and gas prices, particularly with Brent nearing $85 per barrel amid concerns over the Strait of Hormuz, weighed heavily on sentiment.
| Photo Credit:
iStockphoto

Markets endured a brutal session on Wednesday as escalating hostilities under “Operation Epic Fury” involving the US, Israel and Iran triggered a broad risk-off selloff. Though the markets made a late-hour recovery due to a positive opening in European stocks, it was not enough to change the broad sentiment. Fears that the war could further pressure India’s macro through higher crude oil and gas prices and choked sentiment, said analysts.

After hitting a low of 78,443.20 by shedding nearly 1,800 points, the BSE Sensex recovered to close at 79,116.19, with a fall of 1,122.66 points. The Nifty 50 shed 385.20 points, to end at 24,480.50, recovering from the day’s low of 24,305.40.

FIIs rush for exit

Foreign portfolio investors pulled out another ₹8,752.65 crore worth of shares on Wednesday, even as domestic institutions bought aggressively for ₹12,068 crore.

Volatility meter spikes

The fear gauge, India VIX, surged 22.6 per cent to 20.83 — its highest since May 2025 — as Brent crude pushed toward $85 per barrel amid fears of disruption to the Strait of Hormuz.

Energy supply worries

According to Kotak Securities, while a prolonged shutdown appears unlikely, even a disruption lasting a few weeks could cause significant market dislocation. “Early signs of stress are already visible. Qatar, one of the world’s largest LNG exporters, has reportedly shut its LNG plants, exacerbating concerns over supply continuity,” it said in a note..

Broader markets bleed

Broader markets were hit harder. The Nifty Next 50 tumbled 2.70 per cent, the Nifty Midcap 100 fell 2.16 per cent, and the Nifty Smallcap 100 slipped 2.11 per cent. Nifty Bank dropped 1.81 per cent to 58,755.25. Except for Nifty IT, all other indices closed in the red, with Metal being the hardest hit, falling 3.99 per cent, followed by Nifty PSU Bank (3.24 per cent), Realty (3.11 per cent) and Nifty Oil & Gas (3.09 per cent). Nifty IT was the sole gainer, up a modest 0.11 per cent, buoyed by the rupee’s slide.

Global selloff tremors

Ponmudi R, CEO of Enrich Money, captured the global context: “…South Korea’s KOSPI plunged nearly 12 per cent, triggering circuit breakers, while Thailand’s SET index declined over 8 per cent, highlighting the intensity of the global risk aversion.”

On the Nifty 50, only four stocks ended in the green.

Published on March 4, 2026

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Trump likely to raise global import tariff to 15% this week, says Treasury Secretary

by Hansraj Agrawal | Mar 4, 2026 | Business

The Trump administration is set to increase its temporary global import tariff to 15% from 10%, according to US Treasury Secretary Scott Bessent.
| Photo Credit:
Jonathan Ernst

U.S. Treasury Secretary
Scott ‌Bessent said on Wednesday that an increase in President
Donald ⁠Trump’s new temporary global import tariff to 15% from
10% was likely to ‌be implemented sometime this week.
The new tariff rate ‌was announced by Trump ‌in ⁠late February
after the Supreme ⁠Court struck down his previous global tariffs
under a national emergencies law. He initially imposed the
150-day ‌tariffs under Section 122 of the Trade Act of 1974 at a
lower 10% rate.

“That’s likely ‌sometime this week,” Bessent said on CNBC of
the 15% rate order from Trump.

“During ⁠the 150 days, we will see studies from USTR on
Section 301, ‌tariffs from Commerce on Section 232,” he said,
referring to other tariff authorities that have withstood court
challenges.

He said the effort to rebuild Trump’s tariff ‌program under
these authorities would bring U.S. duty rates back to their
prior levels within five months.

“They ⁠are slow moving, but they are ⁠more robust,” Bessent
said of the Section 232 national security-based ‌tariffs and the
Section 301 unfair trade practices tariffs.

Published on March 4, 2026

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Andhra Pradesh CM Naidu alleges scale of liquor scam could be as high as 10,000 cr

by Hansraj Agrawal | Mar 4, 2026 | Business

Andhra Pradesh Chief Minister N Chandrababu Naidu
| Photo Credit:
HANDOUT

Andhra Pradesh Chief Minister N Chandrababu Naidu alleged massive corruption took place in the state’s excise sector under the previous regime, describing the AP liquor scam as one of the biggest ever.

He was speaking in the State Assembly in Amaravati on Wednesday.

He said while earlier estimates pegged the scam at ₹3,500 crore, the scale could be as high as ₹10,000 crore.

The Chief Minister claimed that distilleries were taken over, and wholesale operations, transport and retail liquor shops were controlled by a single network.

He further alleged that transactions were carried out without proper digital tracking, enabling arbitrary and unchecked operations.

Naidu informed the House that the government has constituted a Cabinet Sub-Committee and initiated a comprehensive overhaul of the excise system.

Emphasising that public health is the top priority, he said that earlier only select “own brands” were promoted, whereas now national and international brands are available in the state.

Published on March 4, 2026

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Sri Lanka rescues 32, recovers 87 bodies after Iranian Frigate Distress Call

by Hansraj Agrawal | Mar 4, 2026 | Business

Bodies of Iranian sailors are taken out of a van and moved to the mortuary at Karapitiya Hospital after a submarine attack on the Iranian military ship Iris Dena off Sri Lanka, in Galle, Sri Lanka, March 4, 2026. REUTERS/Thilina Kaluthotage
| Photo Credit:
Thilina Kaluthotage

COLOMBO

US Defence Secretary Pete Hegseth told a media conference in Washington DC that a US submarine sank an Iranian warship in the Indian Ocean.

“An American submarine sunk an Iranian warship that thought it was safe in international waters. Instead, it was sunk by a torpedo,” Hegseth said, terming it a “quiet death” and the “first sinking of an enemy ship” by a torpedo since World War II. “Like in that war,” he said, “we are fighting to win”.

Meanwhile, The Sri Lankan Navy on Wednesday rescued 32 sailors and recovered 87 bodies, following a distress call from the Iranian frigate IRIS Dena, which sank some 40 nautical miles off Galle on the island’s southern coast, authorities said.

The development came to light when Sri Lanka’s Foreign Minister Vijitha Herath informed Parliament on Wednesday, of the distress call at dawn (05.08 hours IST) from the frigate.

Sri Lanka responded swiftly, owing to its obligations under the ‘International Convention on Maritime Search and Rescue’, Herath said. “By 6 am we dispatched a naval vessel and by 7 am the second naval vessel,” he told the House. The injured sailors were taken to a state-run hospital in the southern Galle district.

According to Sri Lankan navy spokesman Buddhika Sampath, the vessel was not visible when the rescuers reached the spot. The Navy is yet to probe the cause for the distress call, and is currently “focused on search and rescue operations”, he further said. “As of now we have recovered 87 bodies,” he told The Hindu at 8.45 pm.

Fleet Review 2026

IRIS Dena was returning after participating in the ‘International Fleet Review 2026’, a global maritime exercise, held in Visakhapatanam in February. A total of 71 warships were part of the Fleet Review, including 19 foreign vessels. Naval sources told The Hindu that while the capacity of IRIS Dena was nearly 180, around 140 persons were believed to be on board at the time of the incident. An official confirmation on the size of the crew is awaited.

When contacted, Iranian Ambassador to Sri Lanka Alireza Delkhosh, who was on his way from Colombo to Galle, told The Hindu : “We have no information yet on the cause, we are in close contact with Sri Lankan authorities. I am on my way to see the survivors.”

Sri Lanka has not commented on the US claiming responsibility for the torpedo attack on the Iranian vessel. Days after the US-Israel combine launched an attack on Iran on February 28, 2026, triggering a wider war in the West Asian region, Sri Lanka expressed “deep concern over the rapid escalation of hostilities” and called on “all concerned parties to exercise maximum restraint and to take immediate and decisive action to de-escalate tensions”.

Published on March 4, 2026

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Coal, aluminium, gold will likely gain from Iran war

by Hansraj Agrawal | Mar 4, 2026 | Business

Coal prices have increased by 18 per cent, aluminium rates by 6 per cent, and gold stands to gain significantly due to the hostilities in the Persian Gulf with the US, and Israel pitted against Iran.

“Following US-Israeli strikes on Iran over the weekend of February 28-March 1, we think gold could reach a new all-time-high above $5,600/oz this week if no signs of de-escalation materialise,” said research agency BMI, a unit of Fitch Solutions.

Gold, which soared to over $5,350 an ounce at the beginning of the week, has pared its gains on a strong dollar and fears of hike in interest rates, to below $5,200 an ounce by Wednesday evening. Reports from the US said that Iran had reached out to the Donald Trump administration for an end to the War.

Cash for liquidity

However, analysts say that the selling in gold seen recently, leading to prices see-sawing, is because investors needed cash for liquidity.

Last week, just before the hostilities broke out, ING Think, the financial and economic analysis arm of Dutch multinational financial firm ING, said that though the momentum in gold may moderate, structural drivers underpinning the market are firmly in place – and in some cases are strengthening.

“…we think gold can still trade higher this week, potentially reclaiming $5,600/oz and posting a fresh all-time-high,” said BMI.

Two reasons

It attributed two reasons to this. The first was the lack of certainty surrounding the duration of the current geopolitical risk premium in oil prices.

“Without a clear consensus on how long the conflict and the associated premium will last, markets will shelter in haven assets like gold,” the research agency said..

The second factor for gold being bullish stems from physical disruption to the bullion market if flights are unable to transit through Dubai, which is one of the world’s largest gold refiners.

“Although this is unlikely to materially affect the physical market, which is highly liquid and well stocked, the premise of disruption will bolster bullish sentiment, in our view,” said BMI.

At 1905 hours IST, gold was quoted at $5,189 an ounce, while the yellow metal’s April futures on COMEX ruled at $5,196.44 an ounce.

Upside risks

ING Think said the escalation in the conflict in the Persian Gulf increased upside risks to physical aluminium premiums, rather than materially tightening global supply.

“The Middle East accounts for around 8 per cent of global aluminium capacity and is heavily reliant on the Strait of Hormuz for both metal exports and alumina imports, with key producers being Saudi Arabia, the UAE and Bahrain,” it said.

BMI expects aluminium to see the largest gains from disruption in the Middle East, with prices ruling near $3,350/tonne currently.

“Heightened risks of disruption in the Strait of Hormuz, a critical export corridor for Middle East aluminium producers, have compounded existing supply-side concerns. Collectively, the UAE and Bahrain accounted for an estimated 6 per cent of global aluminium output in 2025 (around 4.3 million tonnes),” it said.

Fuel switch buoys coal

Reports said aluminium has also surged in view of Qatar halting production due to the tensions in the Persian Gulf region. It will take at least six months for production to resume at Qatalum, a joint venture between Qatar and Norsk Hydro ASA.

BMI said aluminium prices will likely remain near $3,300/tonne in the coming weeks. Any further material escalation would amplify supply-side pressures and present significant upside risk.

“With the market already set to run a deficit in 2026, we believe a deterioration in conditions … could lift prices to $3,500,” said the research agency.

BMI said it sees upside risk for seaborne prices of thermal coal if Strait of Hormuz disruption affects the availability of Qatari liquefied natural gas (LNG), which could encourage fuel switching in key markets such as Japan and South Korea. Qatar has shut down its LNG facilities, a rate event, in view of the crisis after Iranian drones attacked the country’s LNG hub.

“Gas prices have already spiked, with benchmark Henry Hub prices up almost 4% and approaching $3/MMBtu. If the availability of Qatari LNG is constrained for more than a week, a potential winner would be seaborne thermal coal,” said the research agency.

Demand for Indonesia, Australian coal

This would be a temporary and significantly more limited repeat of the situation when the Ukraine war broke out in 2022. Then, the buying of natural gas from Russia got cut, leading to a spike in demand for thermal coal.

On Wednesday, Newcastle thermal coal futures (May) ruled at $138 a tonne, a 16-month high. Qatar accounts for four-fifths of LNG supply in Asia and nearly 15 per cent of global.

Though coal trade is not carried through the Strait of Hormuz, expectations of Japan and South Korea switching to coal from LNG has raised prices of Australian and Indonesia coal by 15 per cent since the beginning of this week.

Published on March 4, 2026

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Indian 10-year G-Sec yield steady at 6.67% despite crude oil surge

by Hansraj Agrawal | Mar 4, 2026 | Business

The benchmark 10-year Government Security (6.48% 2035 GS) yield closed almost flat at 6.6732%, compared to the previous close of 6.68%.

The Government Securities (G-Secs) market seems to be weathering the impact of the likely increase in inflation due to a spike in global crude oil prices, as Banks are supporting yields amid year-end considerations and traders are drawing comfort from India’s reasonable energy buffer.

Yield of the benchmark 10-year G-Sec (6.48 per cent 2035 GS) on Wednesday closed almost flat at 6.6732 per cent (previous close: 6.68 per cent). This comes amid a jump in crude oil prices following the West Asia conflict.

Venkatakrishnan Srinivasan, Founder & Managing Partner, Rockfort Fincap LLP, observed that the G-Sec market has remained relatively stable despite heightened global volatility triggered by escalating geopolitical tensions in West Asia.

“Brent crude moving above $82 per barrel and the rupee weakening toward the 92 level against the dollar would normally exert upward pressure on yields due to concerns around imported inflation and macro stability.

“However, the benchmark 10-year G-sec yield has actually softened during the day, moving from around 6.72% to nearly 6.67%, indicating that domestic demand and technical factors are currently providing support to the market,” he said.

Venkatakrishnan observed that as year-end closure approaches, banks become particularly sensitive to mark-to-market (MTM) implications on their government securities portfolios.

“A sharp rise in yields would translate into valuation losses on bonds held in their available-for-sale and trading books. So, banks generally tend to support the market and may not allow the 10-year yield to sustainably move much beyond the 6.70% level unless the external crisis worsens materially,” he said.

At the same time, the market is also drawing comfort from India’s current energy buffer. Government and industry sources indicate that India has crude oil and petroleum product inventories sufficient to meet demand for roughly 50 days, which reduces the risk of an immediate inflation shock even if crude prices remain elevated in the near term.

Published on March 4, 2026

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