Sensex drops over 300 points, Nifty below 23,950 as market falls for 4th day on rising Iran-US tensions. What’s ahead?
The Indian stock market extended losses for the fourth session on Thursday, with Sensex and Nifty trading lower as oil prices soared after the US
The Indian stock market extended losses for the fourth session on Thursday, with Sensex and Nifty trading lower as oil prices soared after the US military completed its 12th successive night of strikes on Iran.Sensex declined around 338 points at 76,416 while Nifty 50 fell more than 88 points at 23,907 during Thursday's session. Broader markets also extended losses, with Nifty Midcap 100 and Nifty Smallcap 100 indices falling up to 0.3%.IndiGo, UltraTech Cement, Sun Pharma, Asian Paints, Bharti Airtel, Bajaj Finserv, Power Grid, Infosys, Trent, Reliance Industries (RIL) and Mahindra & Mahindra (M&M) shares fell around 1% each to lead losses on Sensex. Bucking the trend, Eternal shares soared 3%.All sectoral indices traded lower, with Nifty Pharma, Nifty Private Bank and Nifty Oil & Gas falling nearly 1% each. The overall market sentiment was bearish, as NSE saw 1,456 declines and 695 advances, while 124 stocks remained unchanged.Oil prices soar as Iran-US conflict escalatesThe US military said it has completed its latest round of strikes on Iran at President Donald Trump's direction, marking a 12th successive night of American attacks.
"U.S. forces struck Iranian military targets including maritime capabilities, missile and drone storage facilities, coastal surveillance sites, and air defense assets," the U.S. Central Command said in a statement.Iran's Revolutionary Guards meanwhile said that an oil tanker had caught fire after an explosion while attempting to pass through what they described as a mined route south of the Strait of Hormuz, and that the two other tankers had turned back.As a result of the latest escalations, oil prices rose more than 2%. Brent crude futures crossed $96 per barrel, nearing the crucial $100 mark. WTI Crude futures meanwhile were trading above $88 per barrel.What lies ahead?The Houthi’s aggressive entry into the Iran-US conflict by attacking Saudi Arabian tankers in the Red Sea is aggravating the West Asia crisis and pushing Brent crude higher, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
When Brent crude trades above $95, which is the price now, it is bound to have sentimental impact on the Indian market, he noted. “India’s vulnerability to high oil price is once again becoming a macro concern.”From the market perspective, the analyst believes that this negative sentiment will weigh on stock markets and keep stock prices largely subdued. However, this will give opportunities to long-term investors to slowly accumulate high quality stocks in growth segments, now available at attractive valuations. “Banking stocks appear attractively valued, particularly in the context of high credit growth and very low NPAs. Q1 results of consumer- facing digital companies reflect robust growth, indicating bright prospects,” according to Vijayakumar.Technical view on NiftyNifty’s inability to float above key pivots has rendered the trend vulnerable for more declines, said Anand James, Chief Market Strategist at Geojit Investments.
The BriefWire