The first week of March witnessed a host of significant developments that could shape the new fiscal 2026-27 (FY27) starting from April. Several high-stakes developments kept the week buzzing for the economy and domestic market this week. These inlcuded the US-Israel-Iran war, crude oil supply disruption over the closure of the Strait of Hormuz, stock market's crash, and a lot more. On the domestic front, India celebrated Holi while the Indian cricket team reached the 2026 ICC Men's T20 World Cup.
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Here's a recap of the week that was:
US-Israel-Iran War
The United States and Israel began coordinated joint attacks on various cities in Iran, starting a major war aimed at a regime change. Donald Trump-led administration undertook the largest military buildup in the Middle East by the US since the 2003 invasion of Iraq. US and Israel have launched joint attacks in the cities of Tehran, Isfahan, Qom, Karaj, and Kermanshah. Further, Iran has retaliated with counter missile and drone strikes throughout the Persian Gulf targeting Israel and US military bases in United Arab Emirates, Kuwait, Jordan, Bahrain, Iraq, Qatar, and Saudi Arabia.
Iran also launched strikes on civilian airports and shipping ports in Kuwait, the UAE, Oman, and Azerbaijan. Britain's Akrotiri and Dhekelia military base on Cyprus was alsi struck by Iranian kamikaze drones. The geopolitical conflict reached its seventh day on Friday, and no indication of de-escalation is visible from either ends. Iran's UN ambassador Amir Saeid Iravani said Saturday morning that at least 1,332 civilians have died and thousands more had been injured so far in the war.
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Death of Iran's Supreme Leader
Iran's Supreme Leader Ayatollah Ali Khamenei was "martyred" in the joint US-Israeli offensive on the second day of the attack, according to the Islamic Revolutionary Guards Corps (IRGC) and the state-run media. The confirmation came hours after US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu claimed to have "eliminated" the Iranian regime's head. The Islamic Republic Of Iranian Broadcasting, the country's official media arm, had then announced that the IRGC plans to "launch the heaviest offensive in history" against Israel to avenge the supreme leader's killing.
Strait of Hormuz Disruption
Iranian authorities closed the Strait of Hormuz since the beginning of the US-Israel-Iran war. The vital maritime chokepoint is crucial for the transportation of one-fifth of the world's crude oil. A closure of the Strait resulted in an immediate spike in global crude oil prices, which are likely to remain high and volatile. The effects are already being seen in global markets. As the third-largest oil importer in the world, India is heavily reliant on foreign imports of oil, which makes Hormuz's closure detrimental.
Stock Market Crash, Crude Oil Price Spike
India's benchmark indexes closed lower to log their worst week in over a year on Friday, as the escalating US-Israeli war with Iran sent crude prices surging and soured global investor sentiment. Brent crude rose to a 20-month high of 87.66 per barrel and is on course for a 20% jump this week, the sharpest rise since March 2022 in the aftermath of Russia's invasion of Ukraine. Higher oil prices are typically negative for India, the world's third-largest crude importer. For the week, Nifty 50 and Sensex lost about 2.9% each, marking their steepest weekly decline since February 28, 2025 and December 20, 2024, respectively.
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