The Fed Hikes at Last, Oil Reverses Course, and Tata Sons Implodes
Nifty closed the week at 23,346.40, down a marginal 0.22% — a sixth straight losing week, though you'd never guess it from the last three sessions, all of which were higher. The Sensex tells a starker version of the same story: down 0.65% for its own sixth consecutive weekly loss, its longest such streak since the pandemic year of 2020. Brent crude explains some of the whiplash. After Saudi Arabia's Hormuz-bypass pipeline was knocked offline by drone strikes and Yemen's Houthis completed a rapid seizure of Red Sea territory around the Bab-el-Mandeb strait — a second global chokepoint suddenly in play alongside Hormuz — Brent touched $110 on Monday, edging past the near-$110 spike this newsletter reported the Thursday before. Then it reversed just as fast, closing the week near $103 as Saudi Arabia scrambled to reroute exports: oil's first losing week in three. In between, the Federal Reserve did exactly what a week of climbing odds had signalled, raising rates for the first time in more than three years. And on Friday, a governance crisis a decade in the making erupted at Tata Sons, wiping out roughly $3.2 billion in Tata Group market value in a single session.
−0.22% — sixth straight losing week
First hike in 3+ years — unanimous 12-0
First losing week in three, after touching $110
Wiped out Friday as boardroom feud goes public
Last week's edition closed with a war escalating and a Fed decision hanging over everything. Both resolved this week, and neither resolved the way the headlines suggested they would. A Saudi pipeline was knocked offline by drone strikes and Yemen's Houthis seized the territory around a second global chokepoint, yet Brent crude — after touching $110 on Monday — fell for the rest of the week to end near $103, its first weekly decline in three weeks. The Federal Reserve raised interest rates by a quarter point on Wednesday, its first hike in more than three years, and Fed Chair Kevin Warsh's hawkish tone briefly sent the Dow down 631 points — before Wall Street erased almost all of it by Thursday afternoon. Indian markets, closed Monday for Ganesh Chaturthi, absorbed a brutal Tuesday sell-off before recovering for three straight sessions, leaving Nifty down just 0.22% for the week and the Sensex down a sharper 0.65% — its sixth consecutive losing week, the longest such streak since 2020. That Sensex-Nifty gap has one clear cause: a boardroom explosion at Tata Sons, where a fight between Tata Trusts and the Tata Sons board over chairman N. Chandrasekaran's reappointment and a forced stock listing wiped $3.2 billion off Tata Group's market value on Friday alone. Gold, which forgot there was a war on last week, remembered this week, rallying more than 2% after an initial Fed-driven dip. And the National Stock Exchange — the venue for almost everything above — opened its own ₹22,562 crore initial public offering, India's second-largest ever.
Brent Touches $110, Then Posts Its First Losing Week in Three
A pipeline sabotaged, a second global strait effectively seized — and crude still ends the week cheaper than it started
Last week's edition closed with Brent easing to $104.61 and a fragile calm ahead of Wednesday's Fed decision. That calm didn't survive the weekend. On Thursday, September 10, drone strikes launched from Iraqi territory hit pumping stations along Saudi Arabia's East-West Crude Oil Pipeline — the kingdom's roughly 750-mile bypass around the Strait of Hormuz — near Riyadh and Medina, sparking fires and injuring several people. Saudi Arabia shut the pipeline down as a precaution on Friday, just as last week's newsletter was going to print, which is why it's showing up here instead. Almost simultaneously, Yemen's Houthis completed a rapid offensive along Yemen's Red Sea coastline, capturing the port of Mocha and then Perim island in the middle of the Bab-el-Mandeb strait — a second chokepoint, this one carrying roughly a tenth of world trade in peacetime, falling under the sway of one side of the war within days of the first.
The market's initial reaction was exactly what you'd expect. With Indian markets closed Monday for Ganesh Chaturthi, Brent had the day largely to itself and used it: crude touched $110.42 a barrel in New York trading — barely above the near-$110 level it had briefly touched the previous Thursday night — as traders digested the pipeline shutdown alongside reports of a fresh Iranian attack on a tanker transiting Hormuz over the weekend. Tuesday brought more of the same, with Brent still trading close to $106 as the 10-year US Treasury yield briefly broke above 5% for the first time since 2007 and Wall Street logged its second straight losing session.
Then, almost as quickly as it had spiked, oil turned around. Saudi Arabia said it could restore roughly half of the pipeline's capacity within days and the rest within about six weeks, and — with quiet assistance from the US military — began routing more of its crude through Hormuz to plug the gap. By Wednesday, Brent had eased toward $105.80; by Thursday it had fallen further, to around $104.82; and by Friday morning it was trading near $103, a third consecutive daily decline. Even Bab-el-Mandeb, the newer of the two flashpoints, showed a similar pattern: shipping-data firm Windward reported that daily transits through the strait fell from 35 before the Houthi advance to 25 immediately after, then recovered to 45 within days. Brent finished the week down roughly 1% — its first losing week in three — a genuinely strange outcome for seven days in which the war visibly widened rather than narrowed.
With Indian markets shut for Ganesh Chaturthi, Brent trades as high as $110.42 intraday — just above the near-$110 level it briefly touched the Thursday before — on the pipeline shutdown and a fresh Iranian strike near Hormuz.
US Treasury yields briefly top 5% for the first time since 2007 as oil holds near $106. Wall Street logs a second straight losing session; Nifty falls 1.19% on reopening.
Saudi Arabia signals it can restore half the pipeline's capacity within days and all of it within six weeks. Brent eases toward $105.80 as the Fed meets.
Brent falls to around $104.82 as Saudi Arabia reroutes crude through Hormuz with US military help; Bab-el-Mandeb shipping traffic recovers to roughly 45 transits a day.
Crude extends its slide to near $103 by Friday morning, leaving Brent down roughly 1% for the week — its first weekly loss in three, even as Tata Sons dominates the local headlines.
It's worth sitting with how counterintuitive that is. A pipeline moving up to several million barrels a day was taken offline by hostile drones. A second chokepoint carrying a meaningful share of world trade came under the effective control of a group allied with one side of the war. And oil ended the week cheaper than it started. The best explanation traders can offer is that markets had already priced in a great deal of disruption risk after months of escalation, and Saudi Arabia's unusually fast, unusually public response — a repair timeline measured in days rather than left to guesswork — did more to calm nerves than the attacks themselves did to unsettle them.