US-Iran tension brought mayhem for Sensex and Nifty today as investors lost Rs 2.97 lakh crore in market wealth during a single session today. Market capitalisation of BSE-listed firms fell to Rs 153.90 lakh crore at the end of market hours compared to Rs 156.87 lakh crore in the previous session. While Sensex closed 787 points lower at 40,676, Nifty declined 233 points to 11,993.
During the day, Sensex lost 851 points to 40,613. The index closed at 41,464 on Friday. Similarly, Nifty lost 252 points to 11,974 compared to the previous close of 12,226.
Sensex and Nifty closed lower for the second consecutive session today after global markets plunged on prospects of rising tension between US and Iran with the latter suspending its commitments under the 2015 nuclear deal it had struck with world powers.
Iran's Supreme Leader Ayatollah Ali Khamenei warned the US on Friday that a harsh retaliation was waiting after the death of its military general Qasem Soleimani. The warning hit market sentiment worldwide.
Manav Chopra, CMT, Head Research at Equity, Indiabulls Ventures said, "Bears pressed the pedal today taking advantage of the current global situation. All sectoral indices witnessed sharp cuts except IT sector being somewhat resilient. Nifty has breached a key support zone of 12,100 and in the near term is in a weaker zone. Recoveries towards 12,100 should be an opportunity to go short on the index. We expect recoveries to be fragile and Nifty is likely to test the support zone of 11,800 on the downside."
Bajaj Finance (4.63%), SBI (4.43%) and IndusInd Bank (3.96%) were the top Sensex losers. On Nifty, top losers were SBI (4.58%) Bajaj Finance (4.52%) and Vedanta (4.47%).
Of 30 Sensex stocks, 28 ended in the red. Titan (1.65%) and PowerGrid (0.10%) were the gainers on the index. On Nifty, 46 stocks fell against 4 ending in the green.
Market breadth was negative with 604 stocks closing higher compared to 1,944 falling on BSE.
Ajit Mishra, VP, Research at Religare Broking said, "The Indian market started the week on a negative note amid escalation of geopolitical tensions between US-Iran. Rising crude oil prices and adverse rupee movement too impacted the sentiments. We maintain cautious stance on the market in the near term. On the domestic front, Q3 earnings and macro data like IIP (scheduled this week) may provide further direction to the markets. However, volatility on the global front particularly any further escalation of US-Iran issue could keep the investors on edge. We advise investors to avoid risky trades, as volatility is likely to remain high."
Mid cap and small cap indices closed 348 points and 273 points lower at 14,765 and 13,715, respectively. Rupee lost 31 paise to 72.11 in early trade today weighed by the spike in crude oil prices, amid rising concerns over US-Iran tensions.
Banking, capital goods, auto, metal oil and gas indices tanked on the BSE today. All 19 BSE sectoral indices ended in the red.
BSE bankex fell the most closing 892 points lower at 35,629. BSE auto index losing 416 points to 17,894. BSE Capital goods index lost 298 points. Metal and oil and gas indices fell closed over 300 points each on BSE.
Bank Nifty too lost 2.59% or 832 points to 31,237.
On a net basis, foreign portfolio investors (FPIs) bought shares worth a net of Rs 1,263 crore on Friday , and domestic institutional investors (DIIs) were net sellers to the tune of Rs 1,029.2 crore, provisional data available with BSE showed.
46 stocks hit their 52-week highs on BSE compared to 102 falling to their 52-week lows. 188 stocks hit their upper circuits compared to 296 reaching lower circuits on BSE.
Siddhartha Khemka, Head, Retail Research at Motilal Oswal Financial Services said, "There would be weakness in the market in short term due to the major escalation in tension in Middle East. Market sentiments have turned negative with rising fear of oil supply disruption after US President Donald Trump threatened sanctions on Iraq, the second-largest producer among the OPEC, after Iraq's parliament voted in favour of expelling the US and foreign troops. Trump also threatened to retaliate against Iran after the country vowed to avenge the killing of its top commander. However, this correction should be looked as buying opportunity from long term perspective as the long-term fundamentals of Indian economy continue to remain strong with the expected gradual recovery in growth and a domestic consumption driven economy."
The global benchmark for crude oil rose above $70 a barrel today for the first time in over three months, with jitters rising over the escalating military tensions between Iran and the United States.
The Brent contract for oil touched a high of $70.74 a barrel, the highest since mid-September, when it briefly spiked over an attack on Saudi crude processing facilities. Stock markets were down as well amid fears of how Iran would fulfill a vow of "harsh retaliation."
Germany's DAX dropped 1.9% to 12,968.93 and the CAC 40 in Paris gave up 1.3% to 5,967.66. In London, the FTSE 100 lost 1.1% to 7,540.92. The future contract for the S&P 500 declined 0.7%, while that for the Dow Jones Industrial Average lost 0.8%.
The Nikkei 225 index in Japan slid 1.9% to 2204.86 on Monday, while Hong Kong's Hang Seng index lost 0.8% to 28,226.19. In South Korea, the Kospi lost 1% to 2,155.07. The S&P ASX 200 was almost unchanged, at 6,735.70. The Shanghai Composite index also was flat, at 3,083.41.
By Aseem Thapliyal