Prime Research Daily Update: Glob͏al ͏Markets ͏Plunge $͏2.3 Trillion͏ as Iran Confl͏ic͏t Threatens $10͏0 ͏C͏r͏ude and Sh͏ipping Crisis

Mumbai͏,͏ March 13: Wall Stree͏t clos͏ed at its͏ ͏lo͏west lev͏els of 20͏26 as t͏he ͏13-day-ol͏d ͏I͏ran conflict intensified, trig͏gering a s͏harp sel͏l-off across glo͏bal financial mar͏kets.͏ The Dow Jone͏s Industrial Average pl͏umm͏eted ͏739 poi͏nts, or 1.56͏%͏, to 4͏6,678, w͏hile the S&P ͏500 slid 1.52% to 6,͏6͏73͏.͏ The Nasdaq Composite fell 1.͏78% to 22,312͏, erasing ͏nea͏rly $2.3 trillion in globa͏l market capita͏lization. Invest͏or sentiment͏ ͏was deeply rattled ͏after Iran’s new Su͏preme Leader, Mojta͏b͏a Kha͏menei, vowed to k͏e͏ep t͏he͏ Str͏ait of Hormuz closed, effectively ͏blocking roughly 90% ͏of norma͏l oil traffic through the͏ world’s ͏most crit͏ical ͏ene͏rgy a͏rtery.͏

Mark͏et͏s r͏eacted ͏not ͏o͏nly to t͏he d͏irect ge͏opol͏itical risk but a͏lso t͏o t͏h͏e p͏otential͏ long-term e͏conomic implic͏ati͏o͏ns of a supply dis͏rupti͏on in crude oil. Analysts no͏ted͏ that t͏he ps͏ychologi͏cal͏ effect of a ͏possible e͏mba͏rgo, c͏ombine͏d with ͏uncertainty in shipping and͏ trade f͏lows, drove a widespread risk-off sentim͏ent. European and A͏sian equit͏ies als͏o posted steep losse͏s, underscoring t͏he interconnected nature of global ͏marke͏ts i͏n͏ the ͏face of g͏eopolitic͏al turmoil͏.

Oil Surges Past $95 as Strait of Hormuz Closure Disrupts 7.5% of Global Supply

WTI crude skyrocketed 10% to surpass $95 per barrel, while Brent crude breached the $100 mark for the first time since August 2022, recording its highest close in over three years. According to the International Energy Agency (IEA), approximately 7.5% of global oil supply has been disrupted, with traffic through the Strait of Hormuz plummeting to below 10% of pre-war levels after Iran pledged not to let “a litre of oil” pass.

Further compounding supply concerns, Iranian strikes on two oil tankers intensified fears of a prolonged shortage. Analysts warn that prolonged disruption at these levels could push energy costs to heights capable of reigniting global inflation. Industries heavily dependent on crude, including manufacturing, transport, and logistics, face immediate cost pressures, and policymakers worldwide are monitoring developments closely.

Federal Reserve Faces Policy Dilemma as Rate Cut Expectations Halve to 30 Basis Points

The Federal Open Market Committee (FOMC) will meet on 17 March amid a dramatically altered economic landscape. Money market futures now price in just a single quarter-point cut by December, down from two cuts expected before the conflict began in late February. Rate-cut expectations have roughly halved from 66 basis points to around 30 basis points in two weeks.

The crude price spike resulting from the 13-day-old conflict has yet to fully appear in official inflation data, complicating the Federal Reserve’s policy calculus. Economists warn that sustained $100 oil could force the central bank to maintain higher interest rates for longer, potentially slowing growth and pressuring corporate earnings. Any misjudgment in policy could further exacerbate market volatility and affect consumer borrowing costs, creating broader economic uncertainty.

Dollar Surges 2% Since Conflict Began as Safe-Haven Demand Drives Index Toward 100

The US dollar strengthened for a second consecutive week, rising 2% since the conflict erupted in late February. The Dollar Index surged toward 100, while the euro-dollar pair (EUR/USD) declined to approximately 1.1530, far below its year-to-date high of 1.2080. Commodity-linked currencies, including the Australian dollar, fell sharply below 0.7100, reversing recent multi-year highs.

Even the Japanese yen remained under pressure despite its safe-haven status, as widening interest rate differentials favored the US dollar. Market strategists note that the dollar’s strength is a reflection of global investors seeking stability amid rising oil prices and geopolitical uncertainty, further affecting the cost of imports for other economies.

White House Considers Jones Act Waiver as IEA Prepares 400 Million Barrel Stockpile Release

To contain rising fuel costs, the Trump administration has instructed US oil companies and shippers to prepare for a potential waiver of the century-old Jones Act, which governs domestic maritime commerce. The waiver would allow non-US vessels to transport oil between American ports, potentially easing supply bottlenecks.

Simultaneously, the International Energy Agency (IEA) proposed releasing 400 million barrels from strategic reserves, with the United States contributing 172 million barrels. Analysts caution that while these measures may provide temporary relief, they are unlikely to offset the scale of supply disruptions caused by Iran’s near-complete closure of the Strait of Hormuz.

US Trade Deficit Narrows 25.3% to $54.5 Billion as Exports Jump to Record High

The US trade deficit narrowed sharply in January, contracting 25.3% to $54.5 billion, driven by record-high exports and lower imports. The Commerce Department’s Bureau of Economic Analysis reported that if the export surge continues, trade could positively contribute to first-quarter economic growth.

December’s deficit was revised wider to $72.9 billion from $70.3 billion, while economists had forecast a January deficit of $66.6 billion. The stronger-than-expected trade performance provides some cushion amid rising energy costs and global market volatility.

Indian Markets Extend Losing Streak With Nifty Below 23,650 as Crude Concerns Weigh

Indian equity markets followed global trends, extending losses for a second session. The Nifty 50 fell 227 points (0.95%) to 23,639, its lowest close since 16 April 2025. The Sensex dropped 829 points (1.08%) to 76,034. Rising crude prices heightened concerns over India’s current account deficit and inflationary pressures, leading to broad-based selling.

The midcap index declined 0.37% to 56,254, while small-cap stocks fell 0.67% to 16,305. Investors cited concerns that higher energy costs could hurt corporate margins and consumer demand, creating uncertainty across sectors.

Rupee Recovers from Record Low to Close at 92.19 After RBI Intervention

The Indian rupee staged a partial recovery after hitting an all-time low of 92.36 against the US dollar, supported by Reserve Bank of India (RBI) intervention. The currency closed 15 paise weaker at 92.19. Traders expect continued volatility, driven by crude prices and global risk-off sentiment.

FIIs Sell ₹3,108 Crore in Index Futures as Short Build-Up Accelerates

Foreign institutional investors sold ₹3,108 crore in index futures on 12 March, with open interest rising by 17,708 contracts—a clear short build-up. Nifty futures open interest rose 1.64% as the underlying index fell 0.95%, while Bank Nifty futures experienced long unwinding. FIIs also sold ₹11,325 crore in index options, reinforcing a broad bearish stance across derivative markets.

Coal India and NTPC Lead Gains While M&M and Eicher Motors Top Losers

Coal India led Nifty 50 gains, rising 5.23% to ₹470.1, followed by NTPC with 2.80% to ₹390.6. Power Grid Corporation added 1.61% to ₹303.6. In contrast, M&M fell 4.32% to ₹3,031.2, Eicher Motors declined 3.83% to ₹6,975.5, and Maruti Suzuki dropped 3.60% to ₹13,011. Auto stocks were pressured by concerns that rising crude could affect input costs and consumer demand.

BSE Power Index Shows Bullish Breakout With 6.21% Jump in JSW Energy

The BSE Power Index regained strong momentum, with technical indicators such as RSI and MACD turning bullish. JSW Energy rose 6.21%, followed by Torrent Power with 4.66%. Adani Power and NTPC also gained, as investors rotated toward defensive power stocks amid escalating geopolitical tensions.

Gold ETF Inflows Slump 78% to ₹5,255 Crore as Profit-Booking Accelerates

Gold ETF inflows fell 78% to ₹5,254.95 crore in February, down from ₹24,040 crore in January, while silver ETFs recorded a net outflow of ₹826 crore. Analysts attribute the slowdown to profit-booking after January price peaks, with funds rotating back toward equity markets despite current market corrections.

Corporate Updates: Strategic Growth and Approvals

Several Indian companies announced key approvals, contracts, and strategic moves. Biocon Pharma received USFDA approval for Liraglutide Injection for Type-2 Diabetes, strengthening its global diabetes portfolio. Aarti Industries secured a multi-year supply contract with a global agrochemical company, generating US$150 million through 2030.

Sigma Advanced Systems divested its 36.52% stake in Switzerland-based Extrovis AG for US$15 million to focus on aerospace and defense. Quadrant Future Tek nears final RDSO clearance for its Kavach 4.0 train protection system, with a ₹898 crore order book. Action Construction formed a joint venture with Japan’s Kato Works to enhance products and market reach.

Kalpataru Ltd signed a ₹1,400 crore redevelopment project in Andheri West, Mumbai. JK Lakshmi Cement secured Assam’s Juipahar Limestone Block and acquired a 77.96% stake in NECEM Cements. Adani Energy Solutions plans to refinance US$500 million debt due 2026 with notes maturing in 2041, optimizing its debt structure.