Sensex falls over 400 points, Nifty below 23,250 amid US-Iran tensions, persistent FII selling
Indian stock market traded in deep red on Tuesday, with Sensex and Nifty falling more than 0.5% each as renewed tensions around the Iran-US war, along with persistent FII selling spooked investors.Sensex declined over 415 points to 73,852, while Nifty 50 fell 142 points to 23,240, as seen at 9.17 am.
This came even as India VIX, which measures volatility in markets, tumbled 2.5% to 16.13.Bajaj Finance shares were the top losers on the index, falling nearly 3%.
Eternal, Bharat Electronics (IBEL), Bajaj Finserv, Trent, NTPC, Power Grid, UltraTech Cement and L&T followed, dropping 1-2%.
Bucking the trend, IT stocks including Infosys, TCS, TechM and HCL Tech gained 1-3%.Broader markets underperformed benchmarks, with Nifty Smallcap 100 and Nifty Midcap 100 indices falling around 1% each.
Sectorally, Nifty Auto, Nifty Realty, Nifty Consumer Durables and few other indices declined more than 1% each.
Bucking the trend, Nifty IT gained nearly 2%.
Around 887 stocks advanced on NSE, while 1,650 declined and 97 remained unchanged.The trend of sustained AI trade, new records for markets in US, South Korea and Taiwan, sustained FPI selling in India and India’s underperformance are continuing with no immediate signs of reversal, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
“To add to India’s problems, the energy shock has led to downward revision of India’s GDP growth and upward revision of inflation this financial year.
And now we have the additional threat of the IMD’s latest projection of monsoon rains at 90% of long term average, which will have negative implications for growth and inflation,” he added.A resolution of the West Asia conflict and the consequent dip in crude price will be a big positive, but expectations on that front have been belied and the issue continues to hang fire, the analyst explained.
“In these tough times of huge uncertainty and challenges, the ideal strategy for investors is to stick to the basics.
Do proper asset allocation based on one’s risk profile and financial goals and wait with patience,” he further said.Iran-US war uncertaintiesIran and US traded strikes, while Israel ordered troops to move further into Lebanon in its battle with the Tehran-backed Hezbollah militant group.
The renewed tensions in the Middle East, after Washington hosted Israel-Lebanon peace talks on Friday, dimmed hopes that the US and Iran could soon announce an extension to their ceasefire, which continues to grow fragile.US President Donald Trump meanwhile took to Truth Social on Monday evening, saying that he persuaded Prime Minister Benjamin Netanyahu to call off the strike on Beirut, following which the Israeli leader "turned his troops around".
"I had a conversation with Bibi Netanyahu today (Monday), asking him not to go into a major raid of Beirut, Lebanon.
He turned his Troops around.
Thank you Bibi," he said, referring to the Israeli prime minister by his widely used nickname.Trump said on Friday he would soon decide on a proposed deal to extend a ceasefire announced in early April.
Israel would be key to any such deal, and Iran has said repeatedly that Hezbollah and Lebanon must be included.
The US has proposed a "gradual de-escalation" plan, a US official said on Sunday.Oil prices riseBrent crude futures neared $95 per barrel mark while WTI Crude futures neared $92 per barrel as a result of the recent escalations.
This comes after Brent and WTI Crude dropped 19% and 17% in May, recording their biggest monthly fall in absolute terms since March 2020 when the COVID-19 pandemic slashed energy demand.The rising military strikes in the geopolitically fragile Middle East raised worries over the prolonged closure of the Strait of Hormuz, a narrow 33-kilometre waterway connecting the Persian Gulf with the Gulf of Oman that handles over 20% of the world’s daily oil and gas shipments.FII selling continuesForeign investors remained net sellers of Indian equities, net selling shares worth nearly Rs 3,912 crore on Dalal Street on Monday.
This came after a massive Rs 22,102 crore selloff in just one session on May 29.
Notably, South Korea’s equity market has overtaken India’s as the world’s sixth largest, driven by a relentless surge in chip heavyweights powering the global artificial intelligence buildout.(With inputs from agencies)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own.
These do not represent the views of The Economic Times) ...