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regular-article-logo Tuesday, 26 November 2024

Markets tumble in early trade amid tensions in Middle East

Sensex falls over 467 points to 65,527 points in early trade; Nifty declines over 144 points to 19,508 points

PTI Mumbai Published 09.10.23, 10:05 AM
Representational image.

Representational image. File

Benchmark equity indices tumbled in early trade on Monday as escalating tensions in Middle East triggered a risk-off in the market.

Market analysts said investors preferred to remain on the sidelines and refrained from taking big risks as the Israel-Hamas conflict has introduced a huge uncertainty for the markets The 30-share BSE Sensex plunged 407.19 points or 0.62 per cent to 65,588.44 points in early trade. The Nifty declined 142.70 points or 0.72 per cent to 19,510.80 points.

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State Bank of India, Tata Steel, Titan, IndusInd Bank and Asian Paints were among the major laggards.

On the other hand IT majors HCL Technologies, Tech Mahindra, TCS, Wipro and Infosys, Hindustan Unilever and Sun Pharma defied the broader market trend and were trading in the positive territory.

The BSE benchmark had climbed 364.06 points or 0.55 per cent to settle at 65,995.63 points on Friday. The Nifty had advanced 107.75 points or 0.55 per cent to end at 19,653.50.

"The Israel-Hamas conflict has introduced a huge uncertainty for the markets. Nobody knows how this war is going to evolve," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

He said that even though it is unlikely to cause major disruption in oil supplies at present, the situation will change if Iran, a major Hamas supporter, is drawn into the war.

"That can disrupt oil supplies causing a spike in crude, which can trigger a risk-off in the market. This is a time to be cautious," he added.

Traders are also expected to remain cautious ahead of macroeconomic data to be announced later this week.

The industrial production and manufacturing data for August are scheduled to be announced on October 12. Simultaneously, inflation rate for September will be announced followed by Wholesale Price Index (WPI) data on October 13.

On Friday, the Reserve Bank of India expectedly left its key interest rate unchanged and signalled it would keep liquidity tight using bond sales to bring prices closer to target.

The six-member monetary policy committee of RBI held the benchmark repurchase rate (repo) at 6.50 per cent in a unanimous decision for the fourth consecutive meeting in a row. It also retained a 'withdrawal of accommodation' stance.

Asian markets are trading lower on Monday as Chinese and Hong Kong shares fell.

European markets finished broadly higher on Friday with Germany's DAX gaining 1.06 per cent. France's CAC 40 was up 0.88 per cent and London's FTSE 100 closed 0.58 per cent higher.

The US markets ended higher on Friday with S&P 500 closing with a gain of 1.18 per cent and Dow Jones Industrial Average Index up 0.87 per cent.

Meanwhile, global oil benchmark Brent crude witnessed a sharp rise of 3.68 per cent to USD 87.69 a barrel on Monday.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 90.29 crore on Friday, according to exchange data.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.

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