The Indian stock market extended losses for the fourth session on Thursday, with Sensex and Nifty closing lower as oil prices soared after the US military completed its 12th successive night of strikes on Iran.
Sensex declined around 364 points to close at 76,391, while Nifty 50 fell nearly 127 points to end Thursday's session below 23,870. Broader markets also extended losses, with Nifty Midcap 100 and Nifty Smallcap 100 indices falling up to 1%.
Mahindra & Mahindra (M&M) and Tata Consultancy Services (TCS) shares jumped around 2% each to lead gains on Sensex, while Eternal, HCL Tech, Bajaj Finserv and Kotak Mahindra Bank shares gained around 1% each. However the downtrend in the benchmark index was led by Adani Ports, Bajaj Finance and IndiGo shares which fell around 2% each.
Sectorally, Nifty Metal, Nifty Private Bank and Nifty PSU Bank indices dropped nearly 1% each. The overall market sentiment was bearish, as NSE saw 2,101 declines and 1,155 advances, while 131 stocks remained unchanged.
What lies ahead?
The Houthi’s aggressive entry into the Iran-US conflict by attacking Saudi Arabian tankers in the Red Sea is aggravating the West Asia crisis and pushing Brent crude higher, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. When Brent crude trades above $95, which is the price now, it is bound to have sentimental impact on the Indian market, he noted. “India’s vulnerability to high oil price is once again becoming a macro concern.”
From the market perspective, the analyst believes that this negative sentiment will weigh on stock markets and keep stock prices largely subdued. However, this will give opportunities to long-term investors to slowly accumulate high quality stocks in growth segments, now available at attractive valuations.
“Banking stocks appear attractively valued, particularly in the context of high credit growth and very low NPAs. Q1 results of consumer- facing digital companies reflect robust growth, indicating bright prospects,” according to Vijayakumar.
Technical view on Nifty
Nifty’s inability to float above key pivots has rendered the trend vulnerable for more declines, said Anand James, Chief Market Strategist at Geojit Investments. He noted that although a collapse is less expected, 23,750 stands exposed.
“Meanwhile, intermittent upswing attempts may be expected, but they will have to push above 24,000 to signal strength. As maintained yesterday, prospects of directional moves appear low,” according to the analyst.
(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)
