Sensex, Nifty fall amid Israel-Palestine tensions; PSU bank shares take big hit, Adani Ports falls 5%

Bear attacked Dalal Street on Monday as the headline peers kicked-off the week on a muted note and dropped sharply on Monday. The rising war tensions between Israel and Palestine dented the global market sentiments. Traders dumped equities to find refuge in the safe-havens like gold and the US dollar.

For the day, BSE's barometer Sensex tumbled 483.24 points, or 0.73 per cent, to settle at 65,512.39. NSE's Nifty50 tumbled 141.15 points, or 0.72 per cent, to end at 19,512.35. Broader markets underperformed headline indices as the BSE midcap index dropped over a per cent, while BSE smallcap index shed about 2 per cent. Fear gauge India VIX surged over 12 per cent to 11.55-level.

Investors dumped equity assets as they turned risk off on concerns that a faceoff between Israel and Hamas could further deteriorate the global economy already reeling under higher interest rates and stubbornly high inflation, said Shrikant Chouhan, Head of Research (Retail), Kotak Securities

"Technically, after a gap down opening the Nifty traded below the 50-day SMA or 19,605 level which would be the immediate resistance zone. Above the same, the index could move up till 19,700-19,725 levels. While 19,480 could be the crucial support zone for the traders, below the level it could retest the level of 19,400-19,390," he said.

Nifty Bank's nearest support is 43,800-43,720 and major support at 43,500 on other hand considering its overall movement, Nifty Bank will have major resistance at 44,120 and post it 44,245 for Intraday trading.  These levels will work best in the case of flat or marginal gap opening, said VLA Ambala, a SEBI registered research analyst from Stock Market Today.

Barring the Nifty healthcare index, all the sectoral indices disappointed. The Nifty PSU bank index crashed more than 3 per cent, while the Nifty Media index dropped over 2 per cent. The Nifty financial services, metal, auto, consumer durable, oil & gas and private bank indices shed over a per cent each.

In the Nifty50 pack, only seven stocks settled in green. Dr Reddy's and HCL Technologies added about a per cent each, while the Tata Consumer Products added over half-a-per cent. ONGC, Hindustan Unilever, Tata Consultancy Services and SBI Life Insurance were the only other gainers for the day.

On the contrary, Adani Ports cracked more than 5 per cent, while HDFC Life Insurance and Here MotoCorp lost about 3 per cent each. Mahindra & Mahindra, Tata Steel and Bharat Petroleum dropped two per cent each. Bajaj Finance, State Bank of India and Adani Enterprises were other top laggards in the blue-chip pack.

An unforeseen escalation in the Middle East has rekindled pessimism in global markets. The rapid surge in oil prices presents a significant threat to the global market, which is already dealing with elevated inflation and interest rates. In the broader markets,  investors reshuffle their portfolios due to premium valuations, said Vinod Nair, Head of Research at Geojit Financial Services.

"Financials and consumer discretionary sectors notably underperformed, primarily due to concerns regarding earnings vulnerability if inflation continues to rise. Conversely, the IT sector is displaying signs of returning to normalcy. While consensus estimates for Q2FY24 remain positive, it's important to note that geopolitical tensions could potentially disrupt this optimistic outlook," he said.

In the broader markets, Maharashtra Bank and UCO Bank plunged 7 per cent each, while Indian Overseas Bank, Central Bank of India and Punjab and Sind Bank tumbled 6 per cent each. Adani Power, Ircon International, Godrej Industires and Union Bank of India posted similar cuts of 6 per cent.

On the other hand, ITI rallied about 12 per cent, while Care Ratings and Raghav Productivity Enhancers gained 10 per cent each. Orient Hotels surged 7 per cent, while Gensol Engineering and Quick Heal Technologies jumped 6 per cent each. Oil India rose more than 5 per cent.

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