Sensex, Nifty tank as Middle East tensions, oil price worries spook markets

The S&P BSE Sensex lost 808.65 points to close at 81,688.45, while the NSE Nifty50 was down 200.25 points to end at 25,049.85.

In Short

• Sensex, Nifty end lower amid Middle East tensions
• Crude oil price concerns impact Indian markets
• IT sector stood out while most sectors faced losses

Benchmark stock market indices closed in red after a volatile day on Friday amid the growing Middle East conflict.

The S&P BSE Sensex lost 808.65 points to close at 81,688.45, while the NSE Nifty50 was down 200.25 points to end at 25,049.85.

Raj Patel, CMO at MintCFD said that Indian markets crashed due to worries about geopolitical tensions regarding the Iran-Israel war, thereby stoking fears of a spike in crude oil prices.

"Investors should keep an eye on crude oil prices, as a rise is negative for oil-importing countries like India. There is also a looming China factor, where the economic stimulus may result in sustained growth in Chinese stocks, prompting a potential outflow of funds from India. Indian Investors and retail traders should watch the emerging situation very closely and be updated on global events," he added.

Leading the gainers was Infosys, which saw a notable increase of 1.51%. Oil and Natural Gas Corporation (ONGC) followed with a rise of 1.18%, while HDFC Life Insurance Company gained 1.00%. Tata Motors and Wipro also ended in positive territory, rising by 0.85% and 0.65% respectively.

On the flip side, several stocks faced significant declines. Mahindra & Mahindra (M&M) experienced the steepest drop, falling by 3.54%. Bajaj Finance was also hit hard, declining by 2.86%. Asian Paints saw a decrease of 2.40%, while Nestle India fell by 2.33%. Bharat Petroleum Corporation Limited (BPCL) rounded out the top losers with a drop of 2.31%.

Vinod Nair, Head of Research, Geojit Financial Services said that the bearish sentiment continued as investors are monitoring the escalating conflict in the Middle East and have adopted a sell-on recovery strategy.

"Crude prices have moved up sharply but may be restricted due to an increase in production from OPEC+. The drag was across sectors led by realty, auto, and FMCG except IT stocks, which gained due to expected benefits from US rate cuts and defensive nature," he added.

Today's Nifty sectoral indices showed a predominantly bearish trend across most sectors, with only two sectors managing to stay in positive territory. The IT and PSU bank sectors stood out as gainers, with Nifty IT rising by 0.45% and Nifty PSU Bank increasing 0.61%.

Nifty Media faced the steepest decline, dropping 2.53%. The automotive sector also struggled, with Nifty Auto falling by 1.30%. The financial services sector saw significant pressure, as Nifty Financial Services declined by 0.93%. Nifty Bank also retreated, losing 0.56%.

Consumer goods weren't spared, with Nifty FMCG sliding 1.62%. Nifty Metal experienced a 0.39% dip, while Nifty Pharma fell by 0.38%.

"The pessimism on the market is expected to continue in the near term amidst rising crude prices and fund flows to cheaper markets like China," said Nair.

"Take a measured risk approach as the volatility may negatively impact the markets, but may also provide an opportunity to trade short-term volatility trends," advised Patel.