Indian shares slide as US to blockade Iran ports after failed peace talks

On April 13, Indian shares fell on Monday, tracking losses across Asia as oil surged above $100 a barrel ahead of a U.S. blockade of Iran’s ports after weekend ‌talks between the two countries failed to yield a deal to end the war.

The Nifty 50 dropped 0.86%, to 23,842.65; the Sensex fell 0.91%, to 76 847.57. The Sensex and Nifty 50 indexes recovered some ground following a 2.1% drop earlier in the day. Other Asian markets fell 0.9%.

“We don’t think it is fair ⁠to expect a deal (between Iran and the U.S.) in one sitting. From the markets’ ​perspective, the recovery last week indicated that the worst is over for Indian equities ​unless there is a significant escalation,” said Arun Malhotra, fund manager at CapGrow Capital.

The benchmarks rose about 6% last week, marking their strongest weekly performance in more than five years as investors took comfort from a fragile U.S.-Iran ceasefire.

Malhotra expects ​volatility to remain elevated, with markets driven by headline risks.

15 of 16 major sectors declined. Small-caps and midcaps both fell 0.5% and 0.60%, respectively.

Reliance Industries, a conglomerate of oil and telecom companies, has dropped by 2.6% since the government increased export duties on diesel and aviation fuel. Tourism, paint ​, and oil marketing companies fell as investors gauged the impact of higher crude oil prices on margins.

Investors weighed the impact of higher crude oil prices on margins.

Media reports stated that Delhi’s draft policy on electric vehicles would provide large exemptions to EVs in order to reduce air pollution. This exacerbated concerns about a possible supply interruption from the Middle East conflict.

The Nifty volatility index jumped to ‌20.5 ⁠from 18.8 on Friday.

Domestic markets will be closed on Tuesday for a local holiday. Trading will resume on Wednesday.