Indian Stock Market Sees Sharp Decline Amid Geopolitical Tensions
On Thursday, the Indian stock market experienced a significant downturn, with benchmark equity indices breaking a three-day winning streak. The sell-off was broad-based, primarily driven by escalating geopolitical tensions between the United States and Iran, which unsettled global market sentiment.
Key Index Performances
The 30-share BSE Sensex tumbled by 1,236.11 points, or 1.48 per cent, closing at 82,498.14. Similarly, the 50-share NSE Nifty slumped 365 points, or 1.41 per cent, ending the session at 25,454.35. This marked a notable reversal from recent gains, highlighting the market's vulnerability to international conflicts.
Top Gainers and Losers
Amid the downturn, certain stocks managed to post gains. In the Nifty50 index, ONGC led with a rise of 3.80 per cent, followed by Hindalco at 0.72 per cent, HDFC Life at 0.49 per cent, and Dr Reddys at 0.16 per cent. Conversely, the top losers included:
- InterGlobe: -3.32 per cent
- Trent: -2.85 per cent
- M&M: -2.80 per cent
- UltraTech Cement: -2.79 per cent
- BEL: -2.76 per cent
In the BSE100 index, gainers mirrored those in Nifty50, with additional stocks like Tube Investments up 0.70 per cent and Divis Labs up 0.23 per cent. The BSE Sensex top losers featured similar names, including Kwality Walls at -2.53 per cent and Kotak Bank at -2.34 per cent.
Expert Analysis on Market Volatility
Vinod Nair, Head of Research at Geojit Investments Ltd, commented on the situation, stating, "The bears took charge of the Indian market as rising geopolitical tensions between the US and Iran unsettled global sentiment, leading to a broad-based sell-off." He further explained that Brent crude surged to its year-to-date high, exacerbating inflation concerns and increasing market volatility. Fears of disruption at the Strait of Hormuz added to the uncertainty.
Nair also noted other contributing factors, including ambiguity around the US Federal Reserve's rate-cut trajectory and continued weakness in the Indian Rupee (INR). The sell-off intensified due to low foreign institutional investor (FII) participation, attributed to the Lunar New Year holiday across key Asian markets and a non-settlement day from a regional banking holiday in India.
Global Market Context
Internationally, Brent crude, the global oil benchmark, rose by 1.02 per cent to $71.07 per barrel, reflecting heightened energy market tensions. In Asian markets, South Korea's Kospi settled about 3 per cent higher, and Japan's Nikkei 225 closed nearly 1 per cent higher. However, markets in Hong Kong and mainland China remained closed for Lunar New Year holidays.
European markets were trading lower in mid-session deals, while US equities had ended in positive territory on the previous day. On Wednesday, foreign institutional investors bought equities worth Rs 1,154.34 crore, and domestic institutional investors were also net buyers, purchasing stocks worth Rs 440.34 crore, according to exchange data.
This market movement underscores the interconnectedness of global events and their impact on domestic financial landscapes, with investors closely monitoring geopolitical developments for future trends.
