The Hormuz toll: India’s service sector hits a wall as commercial gas breaches historic 2,000-rupee mark

[NEW DELHI] What began as a scramble for cooking gas in India’s commercial kitchens has morphed into a systemic energy shock, as the blockade of the Strait of Hormuz threatens to shave a full percentage point off the nation’s economic growth.

Despite government assurances of stability, a brutal 15 per cent retreat in equity markets from their recent highs and a 20 per cent collapse in energy-linked stocks signal that the disruption – which has already forced restaurants to cut menus – is now a broad-based threat. It could push India’s inflation higher and widen the current account deficit.

Commodity analysts at Goldman Sachs expect corporate earnings downgrades to follow with a lag, suggesting the full economic and corporate impact may not yet be reflected in markets.