Indian stock markets opened deep in the red, with both the Sensex and Nifty falling sharply in early trade. The drop is being driven by rising geopolitical tensions between the US and Iran, which have also pushed crude oil prices higherand rattled investor sentiment.
The local share market began lower on Thursday, continuing its slow start as rising crude oil prices and mounting Middle East tensions depressed investor optimism. Selling pressure was visible in banking, financial, and oil & gas stocks, with a few FMCG and technology shares providing some support.
At around 9:17 a.m., the BSE Sensex was trading 364.74 points, or 0.48%, lower at 76,390.31, while the NSE Nifty fell 109 points, or 0.45%, to 23,887.25.
The wider market remained under pressure. Nifty Bank slid 0.80% to 56,671.55, Nifty Financial Services fell 0.61%, Nifty Midcap Select fell 0.52%, and India VIX, the market's fear measure, climbed 1.46% to 13.49, signalling increased volatility.
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Sensex's Top Gainers and Losers
Among the 30 Sensex stocks, Eternal was the biggest gainer, up 1.87%, followed by M&M (up 0.14%), HCLTech (0.06%), and ITC (flat).
IndusInd Bank lost 1.56%, becoming the poorest performance after reporting its Q1 earnings. Bajaj Finance fell 0.96%, UltraTech Cement 0.87%, Tata Steel 0.86%, and Infosys 0.85%.
Other losers included SBI (-0.83%), Axis Bank (-0.81%), Bajaj Finserv (-0.81%), NTPC (-0.73%), Reliance Industries (-0.68%), Asian Paints (-0.66%), HDFC Bank (-0.64%), L&T (-0.64%), Adani Ports (-0.49%), and Power Grid (-0.48%).
Why is the market falling?
Rising geopolitical concerns in West Asia, as well as rising crude oil prices, are once again causing fear in Indian markets, according to V K Vijayakumar, chief investment strategist at Geojit.
"The Houthi's aggressive participation into the Iran-US dispute by assaulting Saudi Arabian tankers in the Red Sea exacerbates the West Asian crisis and drives Brent crude higher. When Brent crude trades above $95, as it currently does, the Indian market is bound to experience a sentimental impact. "India's vulnerability to high oil prices is once again becoming a macro concern," he said.
He believes that the current weakness may present buying opportunities for long-term investors.
"These negative sentiments will weigh on stock markets and keep stock prices relatively low. This will allow long-term investors to gradually collect high-quality companies in growth sectors, which are now accessible at attractive values. Banking equities look to be fairly valued, especially given rapid loan growth and relatively low NPAs. The first-quarter results of consumer-facing digital enterprises show solid growth, signalling promising prospects," Vijayakumar added.
Asian Markets are Mixed
Asian equities were mostly higher on Thursday after strong earnings from major US technology companies fuelled optimism about artificial intelligence spending.
South Korea's Kospi rose more than 3%, boosted by gains in chipmakers, while Japan's Nikkei gained about 1%. MSCI's broad Asia-Pacific index excluding Japan also rose by about 1%.
