Comments
Indian equities tanked over 2 per cent on Thursday, the most in two months and more than other Asian indices, as tensions in West Asia, fear of foreign funds reallocating monies to China and change in index derivatives norms spooked investors.
Oil prices surged past $75 per barrel as the conflict in West Asia threatened to boil over. Rich valuations relative to other emerging markets also weighed on sentiment as China unleased a stimulus package last week to revive its ailing economy.
The Sensex slumped 1,769 points or 2.1 per cent to settle at 82,497, while the Nifty fell 2.12 per cent to 25,250. In the last four trading sessions, Nifty has registered a fall of more than 1,000 points from the all-time high of 26,277 to 25,230.
Broader market indices ended in the negative, with three stocks advancing for eight declines. The Nifty Bank index slid 1,077 points to 51,845, while the Nifty Midcap 100 index fell 1,334 points to 59,025. The market capitalisation of all listed companies tumbled by more than ₹10 lakh crore.
Stocks sensitive to crude oil prices saw sharp declines. BPCL was the top Nifty loser, down 5.2 per cent. Shriram Finance, L&T, Axis Bank and Tata Motors slid over 4 per cent each.
Growing concerns
Vinod Nair, Head of Research, Geojit Financial Services, said: “The domestic market took a sharp downturn following Iran’s launch of ballistic missiles at Israel, sparking fears of retaliation and escalation in war. This could potentially drive-up oil prices and lead to inflationary pressures. Additionally, new SEBI regulations for the F&O segment have raised concerns about reduced trading volumes in the broader market. Lastly, with attractive valuations in China, FIIs have redirected their funds, adding pressure on Indian stocks.”
FPIs sold shares worth over ₹15,000 crore on Thursday while domestic institutions bought shares worth over ₹12,000 crore.
“This decline marked the third-largest drop of the year for the Sensex. Key sectors such as auto and oil & gas were among the biggest losers, with BPCL and Asian Paints under pressure due to rising crude oil prices nearing $75 per barrel. Investors are advised to remain cautious and keep a watch on the global developments and crude oil price dynamics,” said Vikram Kasat, Head - Advisory, PL Capital - Prabhudas Lilladher.
On the domestic front, the second quarter earnings and the RBI policy will provide further cues, according to experts.
Selling momentum
Asian indices traded mixed on Thursday, with the Hang Seng losing nearly 1.5 per cent and Nikkei 225 gaining almost 2 per cent. European indices were trading in the red.
“A long bear candle was formed on the daily chart with long upper shadow. Technically, this pattern is indicating a selling momentum on the downside and also a sell-on-rise in the market. The unfilled opening downside gap of Thursday suggests more weakness ahead,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.