Stock market crashes as US announces Hormuz blockade

The stock market crashed 2% on Monday after United States President Donald Trump on Sunday announced a blockade of the strategic Strait of Hormuz after talks with Iran collapsed.

The blockade, which will take effect at 7.30 pm Indian time on Monday, is expected to further disrupt oil and gas supplies.

The benchmark BSE Sensex index fell by 1,010.89 points, or 1.3%, at 10.55 am. It had fallen by over 1,500 points earlier in the day. The Nifty sank by 293.70 points, or 1.22.

The stock market had risen more than 4.5% in the past week after Washington and Tehran on Wednesday agreed to a two-week ceasefire to allow further negotiations to end the conflict.

On Monday, the India VIX index, which measures volatility in the market, spiked 13%.

Major Asian stock indices also traded lower on Monday. As of 9.30 am Indian time, Hong Kong’s Hang Seng index was down 1.1%, South Korea’s Kospi had crashed 1.3%, Japan’s Nikkei nearly 1% and China’s Shanghai Composite 0.1%.

Oil prices rise, rupee tumbles

Oil prices have risen sharply following Trump’s announcement of a naval blockade of Iran.

Brent crude, the international benchmark, rose more than 8% on Sunday to cross $103 per barrel, AFP reported. The price was $78 per barrel on February 27, a day before the conflict...

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