(RTTNews) - Indian shares fell sharply on Wednesday as renewed U.S.-Iran tensions drove up crude oil prices, threatening inflation outlook and giving rise to Fed rate hike expectations.
The U.S. dollar hit a one-week high, global bond yields surged and oil prices jumped more than 6 percent after U.S. President Donald Trump declared the Iran ceasefire "is over" at the NATO summit.
His remarks came after the U.S. carried out a fresh round of airstrikes on Iran, targeting more than 80 locations in response to Iranian attacks on three commercial vessels in the Strait of Hormuz.
Washington also revoked a waiver that had allowed Iran to sell oil globally. Tehran has hit back with strikes on Bahrain and Kuwait, putting the interim U.S.-Iran peace agreement at risk and fueling concerns of a wider regional conflict.
Investors also awaited the release of the minutes of the first Federal Reserve meeting chaired by Kevi Warsh for fresh insights into the Fed's rate trajectory.
The 30-share BSE Sensex plunged 1,677.12 points, or 2.15 percent, to 76,503.60 while the broader NSE Nifty index settled 516.65 points, or 2.12 percent, lower at 23,882.05.
The BSE mid-cap and small-cap indexes lost 1.7 percent and 2 percent, respectively. The market breadth was weak on the BSE, with 3,187 shares falling while 1,092 shares advanced and 175 shares closed unchanged.
Among the prominent decliners, BEL, ITC, Mahindra & Mahindra, Kotak Mahindra Bank, Bajaj Finance, Hindustan Unilever, Maruti Suzuki India and Indigo plummeted 3-5 percent.
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