Benchmark indices came under selling pressure on Monday, as geopolitical tensions escalated following the US strikes against Iran in the midst of the latter’s conflict with Israel.
Starting the week on a weak note, the Sensex slumped 931 points, or 1.13%, in early trade, mirroring losses in other Asian markets. In the second half, it recouped nearly 700 points (0.84%) but still ended the day lower at 81,896.79, down 511.38 points, or 0.62%. The Nifty also declined 140.50 points, or 0.56%, closing below the 25,000 mark at 24,971.90 Outperforming the benchmarks, the broader BSE Midcap and BSE Smallcap indices ended with gains of 0.20% and 0.57%, respectively. Both indices had fallen up to 0.98% intraday but managed to recoup all losses by the close.
“Markets began the week on a volatile note and lost over half a percent, continuing the ongoing corrective phase,” said Ajit Mishra, senior vice president-research, Religare Broking.
“The weak start was largely due to escalating tensions in West Asia, with the US entering the conflict,” Mishra added.
Additionally, weakness in IT heavyweights following Accenture’s subdued guidance further dampened sentiment, Mishra added.
“Volatility is expected to persist as geopolitical developments continue to steer market sentiment. Investors will also keep an eye on key macroeconomic data and global cues for directional clarity,” said Vikram Kasat, head-advisory, PL Capital.
The India VIX Index rose 2.74% to 14.05, indicating a rise in market volatility.
Foreign portfolio investors (FPIs), who had bought shares worth Rs 11,055 crore last week, turned net sellers on Monday, offloading shares worth Rs 1,874.38 crore. In contrast, domestic institutional investors (DIIs) pumped in Rs 5,591.77 crore, as per provisional BSE data.
Rupak De, senior technical analyst at LKP Securities, said, “The Nifty managed to close above the support level of 24,850, and Indian equities may continue to offer buying opportunities as long as the Nifty sustains above this level. On the higher side, if it moves above 25,000, it may head towards 25,350 in the short term.”
The market breadth was mildly negative, with 2,201 losers versus 1,857 gainers on the BSE. However, investors’ wealth rose marginally by Rs 8,145 crore to Rs 447.8 lakh crore.
Sectoral performance was mixed. IT, TECK, auto, FMCG, and telecom were the top laggards, falling up to 1.48%, while capital goods, services, metals, commodities, and consumer durables led the gainers, rising up to 0.94%.
Infosys, L&T, HCL Tech, M&M, and HUL were the top Sensex losers, declining up to 2.29%. Shares of Indian IT majors came under pressure after global peer Accenture posted weak financial results. Analysts flagged concerns about the demand outlook for Indian IT services based on Accenture’s guidance.
In Asia, the Philippines, Indonesia, and Taiwan were the worst performers, falling up to 1.92%. Japan and South Korea’s equity indices declined marginally by 0.13% and 0.24%, respectively, while China posted gains of 0.65%.
(With inputs from Nesil Staney)