Indian Stock Market Today: Domestic benchmark equity indices, Sensex and Nifty, tanked over 1.5 per cent on Friday as investors turned risk averse due to growing uncertainty after Israel carried out a military strike on Iran.
The BSE’s 30-share Sensex plunged 1.5 per cent, or 1,264.17 points, to open at 80,427.81. The broader Nifty slumped 1.67 per cent, or 415.2 points, to start the session at 24,473.
Global markets plunged in early Asian trading as investors fled to safe havens. Japan’s Nikkei 225 declined 1.17 per cent, the Shanghai Composite slid 0.72 per cent and Hong Kong’s Hang Seng fell 0.7 per cent.
“Sometimes bad news comes in a flood. Close on the heels of the air tragedy has come the news of Israel’s attack on Iran. The economic consequences of this Israeli strike can be profound if the attack and counter attack by Iran lingers long. Israel has declared that the operation will last several days,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
Israel has struck Iranian nuclear targets, including Iran’s primary uranium enrichment facility. Iranian media and witnesses reported explosions at multiple sites and confirmed the killing of Revolutionary Guards Chief Salami in the strike. Israel declared a state of emergency anticipating Iranian retaliation through missile and drone strikes.
Oil prices surged to two-month highs amid concerns about potential supply disruptions. Brent crude prices have flared up by around 12 per cent to $78 per barrel.
“The strike escalates Middle East tensions in a key oil-producing region, exacerbating existing pressure on global markets from US President ’s trade policy overhauls,” said Devarsh Vakil, Head of Prime Research, HDFC Securities.
On the trade war front, President Trump announced he will send letters to trade partners within two weeks detailing new tariff rates. He expressed willingness to extend the 90-day tariff pause, which is set to expire early next month, but believes an extension won’t be necessary.
All broader market indices were in red in the morning trades. Nifty Midcap 100 and Nifty Smallcap 100 declined 1.28 per cent and 1.4 per cent.
The India VIX, an indicator of the market’s expectation of volatility over the near term, surged 11.34 per cent to 15.61 per cent, indicating growing investor anxiety.
Among the sectoral indices, Nifty Auto fell 1.37 per cent and Nifty Metal was down 1.33 per cent.
The NSE companies that declined the most included (1.96 per cent), Power Grid Corporation of India (1.83 per cent), Shriram Finance (1.71 per cent), Ultratech Cement (1.62 per cent) and (1.56 per cent).
The impact on the market will depend on how long the conflict lingers. In the near-term, the market will be in a risk-off mode. Sectors that use oil derivatives as inputs like aviation, paints, adhesives and tyres will be hit hard. Oil producers like ONGC and Oil India will remain resilient, said Vijayakumar.
Investors can wait and watch how the situation unfolds. Nifty is likely to get strong support at 24,500 level, he said.
