Rail, shipping stocks plunge up to 6% as Israel-Hamas war weighs on economic corridor

Major railway stocks like the Indian Railway Finance Corporation (IRFC), Rail Vikas Nigam Limited (RVNL), Ircon International, RITES, and RailTel Corporation of India fell up to 6%.

Meanwhile, shipping stocks like Shipping Corporation of India (SCI), Garden Reach Shipbuilders, Mazagon Dock Shipbuilders, and Cochin Shipyard declined by up to 5% in the intraday trade.

Palestinian Islamist group Hamas on Saturday launched the largest military assault on Israel in decades, killing hundreds of Israelis and triggering a wave of retaliatory Israeli air strikes on Gaza that continued through Sunday.

Global markets, including Indian benchmark indices, fell on Monday reacting to the news. While Nifty50 was down by 129 points or 0.66% and traded at 19,524.35, S&P BSE Sensex was lower by 425.87 points or 0.65% around 1:30 pm at 65,569.55.

Barring the Nifty IT index, all other sectoral indices were in the red.

Other major global indices that are in the red included China’s Shanghai Composite, Kospi, Germany’s Dax, Euro Stoxx 50, and French CAC.

Oil prices were up more than $3/barrel in Asian trade on Monday as military clashes between Israel and the Palestinian Islamist group Hamas deepened political uncertainty across the Middle East and raised concerns about supplies.A normalisation of Saudi-Israeli relations would likely freeze recent moves toward detente between Saudi Arabia and Iran, which has openly praised the
Hamas attacks, Reuters reported, adding that the analysts are worried that oil supplies could choke if Iran is dragged into the conflict.

“If the conflict envelopes Iran… up to 3% of global oil supply is at risk. And if a wider conflict eventuates that ends up impacting transit through the Strait of Hormuz, around 20% of global oil supply could be held hostage,” energy analyst Saul Kavonic said.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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