Oil prices experienced a modest increase on Friday following China’s decision to suspend fuel exports. Concurrently, the United States considered further military deployments to the Middle East, which heightened apprehensions regarding a possible escalation of tensions with Iran and the potential for additional disruptions to regional energy supplies, as reported. Brent crude was last noted at $102.58 a barrel, reflecting an increase of 0.26%, whereas WTI crude was recorded at $92.91 a barrel, showing a rise of 0.04%. Crude prices have experienced an increase for three consecutive sessions as markets assess the implications of tighter fuel supplies from China alongside escalating geopolitical risks in the Middle East. A report indicated that the United States is deploying a third aircraft carrier along with up to 10,000 additional troops to the Middle East, as President Donald Trump considers the possibility of resuming strikes on Iran following the US midterm elections.
The Pentagon was also contemplating the deployment of 10,000 sailors and Marines to the Persian Gulf, thereby providing Trump with further options should he choose to escalate attacks on Iran. China’s restrictions on liquid-fuel exports have heightened apprehensions regarding global fuel supplies. In March, Beijing implemented restrictions on fuel exports in response to the onset of the US-Israeli conflict concerning Iran. The restrictions were eased in July, following which China commenced the monthly management of diesel, petrol and jet fuel shipments. China commenced a weeklong holiday on Thursday, refraining from granting major refiners permission to export fuel to areas beyond Hong Kong and Macau during October. The latest developments indicate that crude flows from the Middle East have largely returned to prewar levels. However, markets continue to express concerns regarding the sustainability of this recovery in the absence of a durable agreement to resolve the conflict.
The prospect of further US military deployments, including another aircraft carrier and 10,000 troops, has raised concerns about a potential escalation in the conflict. Indian commodity traders will adopt a cautious stance on Friday, as the Multi Commodity Exchange of India observes a closure in honour of Gandhi Jayanti, commemorating the birth anniversary of Mahatma Gandhi. Trading in oil, gold, silver, and other commodities on the exchange will remain suspended today and will resume on Monday, October 5. With domestic commodity trading halted, notable fluctuations in international crude, gold, the US dollar, Treasury yields, or geopolitical events during the holiday period may be mirrored in MCX prices when trading recommences on Monday. Indian equity benchmarks extended their losing streak in Thursday’s session, with selling pressure intensifying across market segments amid concerns over rising yields, elevated crude prices, and the broader macroeconomic outlook.
The Nifty 50 experienced a decline of 198.50 points, representing a decrease of 0.88%, concluding at 22,421.95. Meanwhile, the BSE Sensex saw a reduction of 570.59 points, equivalent to a drop of 0.79%, finishing at 71,909.70. The weakness extended beyond large-cap equities. The Nifty Smallcap 100 experienced a decline of 0.97%, and the Nifty Midcap 100 fell by 1.01%, indicating a pervasive trend of selling across the market. Among sectoral indices, the Nifty Auto index stood out as the most significant underperformer, declining by over 3%. The Nifty Metal, Nifty FMCG, and Nifty Consumer Durables indices each experienced a decline of approximately 2%. Market breadth exhibited a distinctly negative trend. Of the 3,707 stocks traded on the NSE, 2,574 experienced a decline, 1,023 saw an increase, and 110 maintained their position.
