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Indian Markets Turn Volatile as USIran Strikes Lift Oil and Gold Demand Collapses

Rising Brent prices, continued foreign outflows and a steep fall in domestic gold purchases are increasing inflation and capital‑flow risks ahead of Fed signals and the RBI policy decision.

Overview

  • Indian equity benchmarks opened higher on Monday but swung sharply and closed lower after renewed USIran strikes pushed Brent toward $93–94 a barrel and knocked over early gains.
  • Domestic gold buying plunged after the government raised the import duty effective May 13, industry groups report roughly a 70% drop in purchases and a shift to lighter jewellery.
  • Foreign institutional investors continued heavy net selling, with provisional data showing about Rs 21,105.86 crore offloaded on the prior trading day, adding pressure to equities and the rupee.
  • Market volatility showed large intraday moves: India VIX fell in early trade as indices rose but markets finished the session down, reflecting how geopolitical risk can flip sentiment within hours.
  • Traders now look to a busy macro calendar—Fed speeches, US economic data and the Reserve Bank of India’s upcoming monetary policy decision—for the next clear direction on rates, inflation and flows.