Indian Stocks Tumble as Trump Rejects Iran Peace Proposal

Indian stock market indices plummeted on Monday, September 28, as geopolitical tensions in the Middle East drove Brent crude prices above $107 per barrel. The BSE Sensex dropped over 900 points within the first hour of trade, erasing nearly Rs 4.9 lakh crore in market capitalization. The crash was compounded by significant foreign fund outflows and rising US Treasury yields.

Donald Trump rejected a proposal from Iran to end fighting and reopen the Strait of Hormuz within seven days. While he indicated that "talks would continue this week," he also signaled that new military strikes could occur following the US midterm elections. In response, Iranian Foreign Minister Abbas Araghchi warned that Iran is prepared for the resumption of war with the United States, though the Iranian government maintains that diplomacy remains the only solution.

Broader Asian markets ended the session mixed. The Shanghai Composite fell amid slowing industrial profit growth in China, while the Hang Seng rose following a two-month extension of the US-China trade truce. Additionally, hawkish signals from the Federal Reserve and rising service-sector inflation in Japan increased global speculation regarding interest rate hikes, further pressuring equity markets.