Last Updated:June 13, 2025, 13:43 IST
Shares of shipping companies surged on Friday amid escalating geopolitical tensions in the Middle East
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Defence Stocks Rally: Shares of shipping companies surged on Friday amid escalating geopolitical tensions in the Middle East, as investors bet on a spike in tanker and container freight rates following Israel’s military strike on Iran.
The Shipping Corporation of India (SCI) jumped as much as 13.3% to ₹233.80 on the BSE, while Great Eastern Shipping Company (GE Shipping) climbed 7.7% to ₹1,049.70. The rally comes as markets brace for potential supply chain disruptions and rising transport premiums across critical oil shipping routes.
Investor sentiment was rattled after Israel launched a large-scale offensive targeting Iranian nuclear and military infrastructure. Reports indicated explosions at Iran’s Natanz uranium enrichment facility, with the country’s Revolutionary Guards confirming the death of top commander Hossein Salami. In response, Israel declared a national emergency, anticipating retaliatory missile and drone attacks.
The geopolitical escalation sent shockwaves through global financial markets. Crude oil surged nearly 9%, with Brent futures spiking $6 to $75.36 per barrel, while WTI rose $6.16 to $74.20. Gold also advanced 1.5% to $3,434 per ounce, approaching its all-time high of $3,500.05, as investors rushed to safe-haven assets. Asian equities slumped and U.S. futures also declined sharply.
The Middle East, especially the Strait of Hormuz, remains a critical chokepoint for global oil shipments. While fears of a major disruption spooked traders, JPMorgan sought to downplay the risk of Iran closing the strait, calling it a “low-risk event.”
“Closure of the Strait of Hormuz would hurt Iran more than help it, both economically and politically, by antagonising its key customers,” the bank said in a note.
Still, the anticipation of higher war premiums and insurance costs on oil shipments has led to renewed interest in shipping stocks. With freight costs poised to rise, stocks like SCI and GE Shipping could benefit from improved earnings potential, analysts said.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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