Market Sell-Off: Israel Conflict Causes 1,769-Point Drop in Sensex, Nifty Hits 25,250

Post by: Omar Nasser

stock market faced a severe downturn primarily due to escalating tensions between Iran and Israel, significantly impacting investor sentiment on Dalal Street. The BSE Sensex plummeted by 1,769 points, or approximately 2%, closing at 82,497, while the Nifty50 index fell below the 25,300 mark, ending at 25,250 after a decline of 547 points, or 2.12%. This tumultuous trading session resulted in a staggering loss of ₹9.6 trillion for investors.

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Throughout the day, the BSE Sensex reached an intraday low of 82,434, while the Nifty50 index dropped to 25,230.30. The sell-off was widespread, with 28 out of the 30 stocks in the Sensex and 48 out of the 50 stocks in the Nifty experiencing losses. Notable declines were observed in several blue-chip stocks, including BPCL, Shriram Finance, L&T, Tata Motors, Reliance Industries, Asian Paints, Axis Bank, Eicher Motors, Maruti Suzuki, Tata Consumer Products, and Bajaj Finance, all of which fell between 3.5% and 5%.

In contrast, JSW Steel and ONGC were the only large-cap stocks to end in the green amid the market chaos. The broader market indices also reflected the bearish trend, with the Nifty MidCap index dropping by 2.2% and the Nifty SmallCap index declining by 1.9%. The volatility in the market was underscored by the fear gauge, India VIX, which surged by 9.4%, indicating heightened investor anxiety.

All sector indices faced significant declines, led by the Nifty Realty index, which plunged 4.6%. The Nifty Auto index fell by 2.7%, while the Nifty Private Bank index decreased by 2.5%. The day coincided with the weekly expiry of futures and options, contributing to the overall volatility and sell-off.

As the trading day progressed, reports highlighted that foreign institutional investors (FIIs) were redirecting funds, adding to the pressure on Indian stocks. Analysts cautioned that a breach of the 25,070 mark could trigger further declines in the Nifty towards the 24,800 level. The Nifty Realty index closed over 4% lower, reflecting substantial losses in the real estate sector, while the broader market indices mirrored the benchmarks' performance, with the BSE MidCap and SmallCap indices ending significantly lower.

Despite the overall market downturn, Marico's stock gained 4%, hitting a new high due to stable volume growth in Q2. Investors remained on edge amid the geopolitical tensions in the Middle East and the implications of new SEBI regulations on futures and options trading, which raised concerns about diminished trading volumes in the broader market. The sharp correction today underscores the volatility and unpredictability that can arise from global events impacting investor confidence in Indian equities.

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