Sensex Falls 295 Points, Nifty Opens Below 24,350 As Iran-US Tensions Weigh On Sentiment
Stock Market Today, August 17: The domestic stock markets started Monday’s trading session on a weak note, with the Sensex and Nifty falling amid cautious global cues and renewed concerns over geopolitical tensions in We
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Sensex Falls 295 Points, Nifty Opens Below 24,350 As Iran-US Tensions Weigh On Sentiment
Stock Market Today, August 17: The domestic stock markets started Monday’s trading session on a weak note, with the Sensex and Nifty falling amid cautious global cues and renewed concerns over geopolitical tensions in West Asia. Selling was visible across several key sectors, although auto, pharma, healthcare and metal stocks showed some resilience.
At 9:21 am, the BSE Sensex was trading at 77,713.87, down 295.38 points or 0.38% from the previous close of 78,009.25. The NSE Nifty was at 24,305.95, down 60.05 points or 0.25%.
The early market weakness was broad-based, although some sectors managed to trade in positive territory. Nifty IT was among the major laggards, falling 0.68%, while Nifty PSU Bank declined 0.90%. Nifty Financial Services was down 0.41%, FMCG fell 0.55% and Nifty Financial Services Ex-Bank declined 0.74%.
On the other hand, Nifty Auto gained 0.41%, while Nifty Media rose 0.46%. Nifty Healthcare gained 0.24% and Nifty Pharma advanced 0.22%. Nifty Metal was also marginally higher at 0.08%.
Most of the major Sensex constituents were trading in the red in early deals. Hindustan Unilever, Bajaj Finserv, Ultratech Cement, State Bank of India, Larsen & Toubro and Infosys were among the notable laggards, falling by up to 1.3 per cent.
On the other hand, Eternal, BEL, Axis Bank and Mahindra & Mahindra were among the stocks showing relative strength, rising by up to 0.6 per cent.
Why Are Indian Stock Markets Falling Today?
Investor sentiment remained cautious as geopolitical tensions in West Asia continued to keep markets on edge. Concerns over disruptions to shipping through the Strait of Hormuz and the impact of elevated crude oil prices have raised worries about inflation and global economic growth.
Ponmudi R, CEO of Enrich Money, said Indian equities are likely to remain range-bound with a cautious bias as geopolitical tensions continue to weigh on risk appetite.
“Indian equity markets are expected to remain range-bound with a cautious bias as persistent geopolitical tensions in the Middle East continue to restrain risk appetite,” Ponmudi said.
He added that ongoing disruptions to regional shipping, Iran’s assertion that the Strait of Hormuz remains under its control and renewed Israeli strikes in Lebanon have increased concerns about further escalation and prolonged disruptions to global energy and trade routes.
Crude oil prices remain a key factor for Indian markets. Brent crude was around $88.50 a barrel on Monday, while US West Texas Intermediate crude was near $82.12 a barrel. Oil prices had posted strong gains last week amid continuing uncertainty around the Iran conflict and the Strait of Hormuz.
For India, higher crude prices can be a concern because the country imports a large part of its oil requirement. A sustained rise in crude can put pressure on inflation, corporate margins and the rupee.
Asian Markets Remain Cautious
Asian markets also lacked a clear direction on Monday as investors assessed the geopolitical situation and the outlook for interest rates. MSCI’s broadest index of Asia-Pacific shares outside Japan was largely flat, while Japan’s Nikkei was up around 0.4%. Australia’s resources-heavy index declined about 0.3%.
Global investors are also looking ahead to China’s July economic data and a series of US economic indicators due this week. In the US, S&P 500 futures were up 0.1%, while Nasdaq futures gained around 0.2%, after Wall Street indices reached record levels last week. Investors are increasingly focused on whether softer US economic data could give the Federal Reserve room to cut interest rates.
Fed Minutes, US Data In Focus
The minutes of the Federal Reserve’s July policy meeting, scheduled for Wednesday, will be a major trigger for global markets this week. Investors will look for clues about differences within the US central bank over interest rates and any indication of how policymakers are viewing the September meeting.
“The minutes of the Federal Reserve’s July policy meeting, due on Wednesday, will be a key focus for global markets,” Ponmudi said.
“Investors will look for greater clarity on the extent of the policy divide within the FOMC and any signals on the Fed’s September policy outlook, with implications for U.S. Treasury yields, the dollar, and capital flows into emerging markets,” he added.
A change in expectations around US interest rates can have a direct impact on emerging markets such as India because it influences the movement of foreign money, bond yields and the dollar.
V K Vijayakumar, chief investment strategist at Geojit Investments Ltd, said, “The market is likely to continue in the range of 24000 – 24600 in the near-term till some triggers emerge to break the range. Crude trading at $ 89, without any prospects for an immediate resolution to the crisis, is likely to cap any uptrend that may emerge. Nifty is being bogged down by the poor performance of the IT majors and the big banking names.”
He added that investors should look beyond Nifty 50 for short-term gains. Plenty of stock-specific action is likely in the mid-and small-cap space. A significant trend from the Q1 results season is the big outperformance of the broader market. The outperformance of the SMIDs in Q1 is likely to continue for the rest of the year, too.
“There is a significant shift in pharma performance away from traditional large pharmaceutical companies to CDMO, hospitals and diagnostics companies. Similarly discretionary consumption is outperforming the traditional FMCG players. Midcap IT is outperforming large-cap IT significantly and this trend is likely to continue. The important takeaway from the Q1 results season is that earnings recovery is happening, and this has the potential to impart resilience to the market despite the external headwinds like strong crude prices,” Vijayakumar said.
Nifty Technical Outlook
According to Ponmudi, the near-term technical outlook for the Nifty remains cautious, with selling pressure visible at higher levels. “Nifty 50 is likely to remain under pressure at higher levels, with the broader technical picture staying cautious in the wake of recent weakness,” he said.
The 24,500-24,600 zone remains an important resistance area for the index. A decisive move above 24,600 could improve market sentiment and open the way towards 24,800-25,000.
On the downside, 24,250-24,300 is the key support zone. Holding this range could help the Nifty remain within its current trading range. However, a decisive break below 24,250 could increase selling pressure and pull the index towards the psychologically important 24,000 level. “Overall the near-term stance remains cautious,” Ponmudi said.
