Oil Surges Past $100 as Strait of Hormuz Tensions Pressure Indian Equities

Indian equity markets are braced for a downward opening on Thursday as geopolitical instability in the Middle East drives crude oil prices higher. The volatility follows reports that Iran fired upon and seized ships in the Strait of Hormuz, effectively closing a critical global energy artery. The escalation comes as Tehran dismissed a U.S. ceasefire extension as "meaningless," citing violations by the U.S. and Israel. While the U.S. has maintained a naval blockade of Iranian ports, the resulting instability has pushed Brent crude futures above $102 per barrel, sparking concerns over global inflation and central bank interest rate trajectories. The impact was evident on Wednesday, with the Sensex and Nifty sliding 1% and 0.8%, respectively. The Indian rupee also weakened, settling at 93.78 against the U.S. dollar. This decline was exacerbated by significant capital outflows, with foreign investors net selling shares worth Rs 2,078 crore and domestic institutional investors selling Rs 1,048 crore. Sentiment in India was further dampened by disappointing fourth-quarter results from IT services firm HCL Technologies. Globally, the reaction has been mixed; while U.S. indices reached record highs on strong corporate earnings, European markets trended lower, and Germany revised its growth forecasts for 2026 and 2027 downward.