Sensex declined around 516 points to close at 77,328, while the Nifty 50 index dropped 150 points to end the session at 24,176. This came as India VIX, which measures market volatility, gained around 2% to 16.92.
State Bank of India (SBI) shares tumbled 7% after the lender’s Q4 earnings failed to impress markets. HDFC Bank, Bajaj Finance, Axis Bank and UltraTech Cement dropped around 2% each to follow SBI as Sensex top losers. Titan shares meanwhile surged 5% after Q4 earnings. Asian Paints shares gained 3%, while Adani Ports, Infosys, HCLTech and TechM shares gained 1-2%.
Despite the overall downturn, Nifty Smallcap 100 rose 0.2% to close in the green. Nifty Midcap 100 index however fell 0.2%. Sectorally, Nifty PSU Bank declined more than 3% to lead losses, while Nifty IT gained 1%. Around 1,783 stocks declined on the NSE, while 1,501 advanced and 101 remained unchanged.
What’s bothering markets?
Notably, the market downturn comes amid the seesaw political developments in the Middle East. US President Donald Trump said that three American Navy destroyers were attacked as they moved through the strait. Trump later told reporters the ceasefire was still in effect and sought to play down the exchange.
Amid these flip-flops, oil prices gained. Brent crude rose over 1% to $101 per barrel. While Brent crude prices have significantly reduced after hitting as high as $120 per barrel last week, they still remain above the crucial $100 per barrel mark, spooking investors.“The de-escalation and escalation drama in West Asia continues, with crude prices moving down and up in response. An important market trend amid this crisis is that despite geopolitical tensions, some markets are doing extremely well while others are performing poorly. South Korea and Taiwan are the star performers this year, with 71% and 40% returns YTD. These excellent returns have been generated by a few AI stocks. In contrast, India, impacted by the energy crisis, has delivered negative returns, with Nifty posting a -6.96% return YTD,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.An important trend in India is the outperformance of the broader market, according to the market analyst. He highlighted that the Nifty Midcap index hit a record high yesterday despite high valuations. Nifty is being weighed down by sustained FPI selling, particularly in heavyweights in banking and IT, according to the analyst.
Rupee tumbles
The rupee declined 25 paise to 94.47 against the US dollar in early trade. This came after the Indian currency recorded sharp gains over the past two sessions, recovering from an all-time low of 95.4325 hit earlier in the week.
“The broader outlook remains sensitive to crude prices and final clarity on the US–Iran proposal,” said Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities.
FII selling
Foreign investors remained net sellers of Indian equities for the third consecutive session on Thursday, although the quantum was significantly lower than in the previous two days. FIIs net sold Indian shares worth Rs 341 crore, according to provisional data from the NSE.
Global markets, meanwhile, also remained in the red, with Hong Kong’s Hang Seng declined nearly 1% and South Korea’s Kospi closed with marginal gains on Friday, while Japan’s Nikkei dropped 0.35%.
European benchmark indices, including the UK’s FTSE and Germany’s DAX, fell up to 1%. Wall Street lost steam and closed in the red yesterday.
(With inputs from agencies)(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. These do not represent the views of The Economic Times)
