India’s benchmark equity indices, the BSE Sensex and NSE Nifty, concluded Monday’s trading session with a notable decline, falling by nearly one per cent. The downturn was largely attributed to heightened concerns over a prolonged conflict stemming from the collapse of US-Iran negotiations, which consequently propelled crude oil prices to significantly higher levels.
Information was available with The Chenab Times that the 30-share BSE Sensex experienced a sharp fall of 702.68 points, or 0.91 per cent, to settle at 76,847.57. Earlier in the trading day, the index had touched an intra-day low of 75,868.32, marking a substantial drop of 1,681.93 points, or 2.16 per cent. Similarly, the 50-share NSE Nifty plunged by 207.95 points, or 0.86 per cent, to close at 23,842.65.
Among the prominent laggards on the Sensex were major companies including Maruti, InterGlobe Aviation, Bajaj Finance, Reliance Industries, Tata Consultancy Services, and HDFC Bank. Conversely, ICICI Bank, NTPC, and Axis Bank emerged as gainers during the trading session.
The geopolitical developments that significantly influenced market sentiment involved the failure of talks between the United States and Iran. These crucial discussions, which lasted for 21 hours in Pakistan, did not result in a peace deal, leaving the status of a two-week ceasefire uncertain. Both nations reportedly attempted to assign blame for the breakdown of the negotiations, exacerbating global unease.
In response to the escalating geopolitical tensions, Brent crude, the international oil benchmark, saw a substantial surge of 7.73 per cent, reaching USD 102.6 per barrel. This spike in oil prices has ignited concerns regarding inflation, currency stability, and broader macroeconomic balances, consequently weighing down overall investor sentiment.
Across Asian markets, a mixed trend was observed. South Korea’s benchmark Kospi, Japan’s Nikkei 225 index, and Hong Kong’s Hang Seng index all ended lower. Shanghai’s SSE Composite index, however, managed to settle marginally higher. European markets were also trading in negative territory during the session.
Market analysts noted that while a recent ceasefire framework provided some support, its current intact status encouraged selective buying interest and a ‘buy-on-dips’ approach. However, the initial negative reaction to the failed US-Iran talks and the subsequent announcement of a US naval blockade in the Strait of Hormuz, pushing crude prices above the USD 100 per barrel mark, overshadowed these positive factors.
The weakness in the markets was primarily driven by the escalating geopolitical tensions following the collapse of US-Iran talks, which triggered a sharp spike in crude oil prices and negatively impacted global sentiment, according to market experts. The BSE MidCap Select index dropped by 0.82 per cent, and the SmallCap Select index declined by 0.33 per cent, indicating a broad-based selling pressure.
Sectoral performance showed that Auto stocks experienced a decline of 2.10 per cent, followed by Energy (1.34 per cent), Services (1.31 per cent), Oil & Gas (1.25 per cent), Consumer Discretionary (1.21 per cent), IT (1.17 per cent), and BSE Focused IT (1.02 per cent). Telecommunication, Utilities, and Power sectors were among the few that registered gains.
On the broader market front at the BSE, a total of 2,573 stocks declined, while 1,790 advanced and 201 remained unchanged. In a separate development, Foreign Institutional Investors (FIIs) turned net buyers on Friday, acquiring stocks worth Rs 672.09 crore, according to exchange data. For context, on Friday, the Sensex had surged by 918.60 points, or 1.20 per cent, to close at 77,550.25, and the Nifty had climbed 275.50 points, or 1.16 per cent, ending at 24,050.60.
Indian stock markets are scheduled to remain closed on Tuesday in observance of Baba Saheb Ambedkar Jayanti.
The Chenab Times News Desk