Geopolitics

Donald Trump’s threats of action against Iran have heightened Middle East tensions and pushed Brent crude oil futures up to $96 a barrel. Against that backdrop, India’s Nifty 50 fell 0.8% to 23,996, while Bank Nifty dropped 1.23% to 57,127. Technical signals show the Nifty has slipped below key moving averages, while the ADX fell to 9.61, its lowest level in three years, placing the market in a low-volatility squeeze ahead of a potential directional move.

The U.S. carried out an eleventh round of military strikes against Iran, with the Secretary of State saying Tehran is “not serious about talks,” sharply escalating geopolitical tensions. Brent crude rose to a more than one-month high and briefly topped $95 a barrel, while WTI climbed 3% to $86.83. The S&P 500 fell 0.2% and the Nasdaq 100 slid 0.5%, with QQQ down 0.8%. Tesla, Google, Reddit and Amazon came under pressure on earnings misses or concerns about capital spending, pushing their shares lower after hours.

Houthi forces have escalated their Red Sea blockade, raising concerns over global shipping and energy supplies. Japan, which relies heavily on Middle East oil imports, saw the yen slide below 163 per dollar for the first time since 1986, fueling expectations the Bank of Japan could raise interest rates faster. Meanwhile, API data showed U.S. crude inventories unexpectedly rose by 2.603M barrels, offsetting some risk tied to the Red Sea. The article also flags a pullback in chip stocks and a split in early flows among the “Magnificent Seven,” with Alphabet and Microsoft seeing inflows while Tesla and Apple saw outflows.

Nicaraguan President Daniel Ortega has said the country will stop holding elections, prompting a sharp response from Washington. U.S. Secretary of State Marco Rubio said Nicaragua should not expect “business as usual” with the United States. The U.S. buys 35% of Nicaragua’s coffee exports, and Nicaragua earns about half a billion dollars a year from coffee exports worldwide. With U.S. coffee supplies tight for four years and retail prices near decade highs, any import restrictions or higher tariffs could further squeeze availability.

Oil prices extended gains amid continued attacks between the United States and Iran, lifting Brent to $92.05 a barrel and U.S. WTI to $85.19. Asian equity markets were mixed, with Japan’s Nikkei 225 up 1.9% and South Korea’s Kospi up 4.6% while Hong Kong’s Hang Seng slipped 0.7%. Analysts said Japan faces twin imported inflation pressures as a weaker yen coincides with higher crude prices. On Wall Street, all three major indexes rose, led by AI chipmakers.

A breakdown in the temporary U.S.-Iran ceasefire has again shut the Strait of Hormuz, while Yemen’s Houthi rebels have ended a four-year informal truce with Saudi Arabia and declared a blockade that could close the Bab El-Mandab Strait. Russia has also suspended diesel exports, which account for some 12% of the global market. The combined supply disruptions pushed diesel prices up P10–P12 per liter in a week, and oil is likely to stay above $80 per barrel for the next two or three quarters. The shock is expected to intensify pressure on global inflation and weigh on GDP.

The U.S. and Iran exchanged military strikes for a 10th consecutive day, and the UK navy said Iran hit two vessels near the Strait of Hormuz. Houthi rebels said they will impose a maritime blockade on Saudi Arabia. WTI crude futures rose more than 1% on the day to a five-week high. The escalation has rattled a key global oil-shipping corridor and lifted the geopolitical risk premium.

U.S.-Iran mediation efforts eased upward pressure on crude prices, pushing Brent down from a one-month high. European technology stocks rose 0.9%, led by sharp gains in ASML and ASMI. Concerns over energy supplies lingered as Yemen's Houthis maintained a blockade of Saudi Arabia.

Signs of a diplomatic thaw between the U.S. and Iran pressured oil prices, while spot gold rose 0.9% to $4,042.69 an ounce. Iran said it had received a proposal from mediators for a 10-day ceasefire to salvage a fragile interim deal, according to Reuters. Markets took the headlines as easing inflation risk and softer expectations for U.S. Federal Reserve rate hikes, which supported gold as an asset sensitive to real interest rates.

Yemen’s Houthis threatened to impose a naval blockade on Saudi Arabia, saying it could disrupt the Bab elMandeb Strait, a key global oil-shipping route. The escalation in the Middle East pushed crude to a monthly high, stoking inflation worries and boosting demand for safe-haven assets. Gold and silver climbed in both MCX and overseas markets, with MCX gold futures up Rs 1,000 per 10 grams and MCX silver futures up Rs 3,109 per kg, while spot prices also strengthened.