Sensex, Nifty fall amid West Asia tensions; IT stocks tumble over 2%

The S&P BSE Sensex fell 263.34 points, or 0.36%, to 73,719.84 in early trade, while the NSE Nifty50 dropped 70.70 points, or 0.30%, to 23,144.25 as of 9:24 am.

In Short

• Markets opened lower due to US-Iran conflict and rising crude prices
• IT stocks led losses with HCL Technologies falling 3.57%
• FIIs continue to exit Dalal Street, causing headwinds for markets

Stock markets opened lower on Thursday as fresh military action by the United States against Iran, rising crude oil prices and fears of prolonged high interest rates in the United States hurt investor sentiment.

The S&P BSE Sensex fell 263.34 points, or 0.36%, to 73,719.84 in early trade, while the NSE Nifty50 dropped 70.70 points, or 0.30%, to 23,144.25 as of 9:24 am.

The latest fall came after the US launched fresh strikes on multiple targets in Iran and President Donald Trump warned of further attacks if a peace agreement was not reached. The renewed tensions in West Asia pushed oil prices higher and triggered a risk-off mood across global markets.

Brent crude rose nearly 2% to $94.93 per barrel, while WTI crude gained 2.24% to $92.05 per barrel. Higher crude prices are a concern for India, which imports the majority of its oil requirements, as expensive crude can increase inflation and put pressure on the economy.

IT STOCKS LEAD LOSSES

Information technology stocks were among the biggest drags on the market amid weakness in global technology shares.

The Nifty IT index dropped 2.31%, making it the worst-performing sector in early trade.

Among Sensex stocks, HCL Technologies was the biggest loser, falling 3.57%. Infosys declined 2.58%, Tech Mahindra fell 2.29% and TCS slipped 1.43%.

Other laggards included Trent, which fell 1.52%, Titan down 1.41%, Eternal down 1.23%, Mahindra & Mahindra down 1.17% and UltraTech Cement lower by 1.17%.

FMCG, DEFENSIVE STOCKS OFFER SOME SUPPORT

Some defensive stocks managed to limit the fall in the benchmark indices.

Power Grid was the top gainer on the Sensex, rising 1.03%. Bharti Airtel gained 0.67%, ICICI Bank climbed 0.51%, and IndiGo rose 0.35%.

Sun Pharmaceutical, Axis Bank, NTPC and State Bank of India also traded in the green.

Among sectoral indices, Nifty Pharma gained 0.55%, while Nifty Media rose 0.29%. Nifty Private Bank was marginally higher by 0.05%.

However, Nifty Auto declined 0.70%, Nifty FMCG fell 0.40%, and Nifty PSU Bank slipped 0.54%.

Selling pressure was visible across the broader market as well.

The Nifty Midcap 100 and Nifty Smallcap 100 fell 0.32% and 0.34%, respectively, while the Nifty 500 slipped 0.32%.

India VIX, the market's fear gauge, was largely flat at 15.63, indicating that investors remained cautious.

WEAKNESS MAY CONTINUE

Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the renewed geopolitical tensions and rising US inflation have created fresh challenges for equity markets.

"The off and on geopolitical drama in West Asia continues with the latest escalation in the conflict pushing Brent crude to $95 again. Inflation in the US has spiked to 4.2% indicating the possibility of a rate hike by the Fed," he said.

Vijayakumar added that higher US bond yields could put further pressure on global equities, especially technology stocks.

He said the weakness in US tech shares may continue, but it is still uncertain whether this will bring foreign investors back to India.

According to him, steps taken by the RBI and the government have helped stabilise the rupee, but this has not yet been enough to improve market sentiment significantly.

Going ahead, investors will keep an eye on developments in the US-Iran conflict, crude oil prices and the US Federal Reserve's interest rate outlook.

A sustained rise in oil prices and higher global interest rates could keep markets volatile, while any signs of easing geopolitical tensions may provide relief.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

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