Indian investors continued selling, triggering the benchmark indices to tumble in the second consecutive session as oil prices surged following the closure of the Strait of Hormuz. The benchmark Nifty 50 and Sensex 30 closed at 24,480.50 and 79,116.19 points, down 1.5% and 1.4% respectively on March 4, responding to the oil shock. The Nifty 50, where trading volume was highest, opened at 24,388.80 points, down over 2% from the previous close, and reached a day’s low of 24,305.40 points before hitting a high of 24,602.45 points before closing. Twenty of the 21 sectoral indices declined, with some crashing more than 3% in the session. The only index that remained stable was the IT index, which rose marginally by 0.1% over the previous close. Analysts noted that the West Asian crisis is impacting Indian markets through the oil price channel, as the country’s direct exposure is tied to oil prices. Brent crude futures, a benchmark for global oil prices, rose to $80 a barrel on March 3 and peaked at $84.5 a barrel before settling at $81.13 a barrel on March 4. Experts highlighted structural risks to India’s oil supply due to the disruption. Sumit Pokharna, VP Fundamental Research at Kotak Securities, warned that India faces elevated exposure to the crisis, with 50–55% of its crude oil and LNG imports transiting the Strait of Hormuz. Strategic petroleum reserves cover only about 8–9 days of oil demand, and there are no comparable reserves for natural gas. If the disruption persists, supply-side stress could intensify rapidly, with gas supplies potentially being rationed in the near term. The surge in oil prices also threatens to widen India’s current account deficit and weaken the rupee. The Indian currency closed at ₹92.2 per dollar, a fresh low, marking a 7.3% depreciation from ₹85.47 per dollar in March 2025.#brent_crude #strait_of_hormuz #nifty_50 #kotak_securities #sensex_30
