Sensex, Nifty Shiver on Friday the 13th: Gold & Oil Rally as Israel-Iran Tensions Rattle Markets

Sensex Crashed, Gold all-time-high, Brent crude above $78: 'Friday the 13th' is quite evidently playing its move in global markets. Israel's recent strike on Iran's nuclear and military sites has escalated tensions around war-like situation in the West Asian region. Domestic benchmark indices, Sensex and Nifty, crashed over a per cent on Friday as investors feared ripple effects that could lead to trade disruptions.

Oil prices witnessed a sharp surge after witnessing a dull trajectory over the past few months, with Brent crude jumping nearly 9% to around $78 a barrel. Meanwhile, demand for the safe-haven asset, gold, also skyrocketed. At home, gold prices surged past ₹1,00,000 per 10 grams on the MCX for the first time.

"Geopolitical issues escalated further with Israel's attacks on Iran and Nuclear sites rumoured to be targeted. Prices react with ₹1,500-₹1,900 gains as Iran retaliates threats loom which can create war situations between the two," said Jateen Trivedi, VP research analyst- commodity and currency, LKP Securities.

Broader Asian markets also witnessed a sharp fall, with Japan's Nikkei declining nearly 0.9% or over 338 points. Hong Kong’s Hang Seng Index fell over 0.93%, or more than 200 points, while South Korea’s Kospi slipped 0.87%.

"The economic consequences of this Israeli strike can be profound if the attack and counter attack by Iran lingers long. Israel has declared that the operation will last several days. Brent crude prices have flared up by around 12% to $78. It can rise further if Iran in retaliation closes the straight of Hormuz severely restricting oil supply," said VK Vijayakumar, chief investment strategist, Geojit Investments.

Nearly all sectors were trading in red. The Nifty PSU Bank was among the worst-performing indices, falling over 1.4%, as of 01:30 pm. From the Sensex 30 pack, almost all stocks were trading in the red territory, except Tech Mahindra, TCS and Sun Pharma. Whereas, Adani Ports, SBI, IndusInd Bank, Powergrid and Bajaj Finserv were the top laggards.

"Sectors that use oil derivatives as inputs like aviation, paints, adhesives and tyres will be hit hard. Oil producers like ONGC and Oil India will remain resilient. Investors can wait and watch how the situation unfolds," Vijayakumar said.