The sudden spike following Israeli military strikes on Iran on June 13 has sent shockwaves through global financial markets. The prices of crude oil and gold surged as investors scrambled to get out, with India's Sensex index plummeting, an indication of risk aversion across the board. This emerging geopolitics crisis is a reminder of how rapidly war in the Middle East can shake its ripples out to global commodity and equity markets.
/*Oil Prices Soar on Supply-Fear Surge*/
Brent crude rose over 7%, finishing around $75‑77 a barrel—its largest one‑day increase in three years—after tensions over disrupted supply through the Strait of Hormuz grew. U.S. crude rose 7–10% as investors worried Iran might retaliate against shipping lanes or oil infrastructure. Energy markets then fear additional fuel price stress if hostilities intensified, possibly stoking worldwide inflation.
/* Gold Rallies as Investors Seek Safety*/
Gold surged about 1–1.5%, to near $3,450/oz on the London market—near historic spring record highs—as equities were jettisoned by investors into safe-haven assets. Experts attribute this standard "flight to safety" pattern amid geopolitical tensions, with gold acting as a hedge against inflation and systemic risk.
/*Sensex Crash Reflects Risk-Off Sentiment*/
India's Sensex declined around 570–823 points, or 0.7–1.0%, and the Nifty dipped below 24,750 in the market-wide selling. All sectoral indices finished in the red, India VIX increased over 7%, and foreign institutional investors offloaded ₹3,800 crore of equities in the wake of concerns about global volatility. Specialists warn that prolonged tensions could prolong the downfall.
/*Broader Market & Policy Implications*/
Global equities suffered too: Dow futures fell over 800 points, while European, Asian, and American indices slipped in risk-off mode. Increasing oil and gold could fuel inflation, prompting central banks to be wary. Supply-chain shocks—especially if shipping through the Middle East becomes risk-hazardous—could add to inflationary pressures and bear down on growth.