Mumbai, February 19 – The benchmark Sensex plunged by 1,236 points or 1.5%, while the Nifty closed near 25,450 on Thursday, following a widespread selling trend amid escalating geopolitical tensions between the US and Iran.
Halting a three-day gaining streak, the 30-share BSE Sensex fell by 1,236.11 points, or 1.48%, to close at 82,498.14. During the day, the benchmark dropped by 1,470.05 points, or 1.75%, hitting an intraday low of 82,264.20.
The 50-share NSE Nifty slumped by 365 points, or 1.41%, to close at 25,454.35. In the intraday session, the broader NSE Nifty declined by 430.6 points, or 1.66%, to a low of 25,388.75, as 47 of its constituents ended in the red while three closed in the positive zone.
Among the Sensex constituents, IndiGo, Mahindra & Mahindra, UltraTech Cement, Trent, Bharat Electronics Ltd, Adani Ports, Kotak Mahindra Bank, Reliance Industries, Tech Mahindra, ITC, Eternal, and PowerGrid were the major laggards.
"The market experienced a downturn due to rising geopolitical tensions between the US and Iran, which led to a broad-based selling trend," said Vinod Nair, Head of Research, Geojit Investments Ltd.
He added that Brent crude surged to its year-to-date high, exacerbating inflationary concerns and triggering heightened market volatility due to the fear of disruption in the Strait of Hormuz.
"At the same time, uncertainty surrounding the US Federal Reserve's interest rate cut and continued weakness in the Indian rupee impacted the domestic market. Selling intensified due to low participation from Foreign Institutional Investors (FIIs) due to the Lunar New Year holiday across key Asian markets and a non-settlement day due to a regional banking holiday in India," Nair said.
A total of 2,927 stocks declined, while 1,276 advanced and 164 remained unchanged on the BSE.
Broader indices ended lower, with the BSE Midcap Select Index declining by 1.71%, while the Smallcap Select Index fell by 0.98%.
Among sectoral indices, Realty declined the most by 2.54%, followed by Power by 2.22%, Capital Goods by 2.18%, Services by 2.11%, Auto by 2.09%, Consumer Discretionary by 1.91%, Utilities by 1.90%, and Industrials by 1.81%.
The market capitalization of BSE-listed firms eroded by Rs 6,79,210.1 crore to Rs 4,65,22,014.57 crore (USD 5.13 trillion).
"On Thursday, benchmark indices experienced a significant decline, snapping a three-day winning streak. Market sentiment turned cautious amid rising geopolitical tensions, following concerns over a potential conflict between the US and Iran and speculation of possible military action over the weekend," said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.
He added that "we expect markets to remain cautious in the near term given escalating geopolitical risks and the possibility of oil supply disruptions."
"Any escalation involving Iran could impact shipments through the Strait of Hormuz, which would be particularly negative for India given its heavy dependence on crude imports from the region."
"On the macro front, investors will track key data releases due on Friday, including India's Manufacturing and Services PMI, US CPI, and Q4 GDP," Khemka said.
Meanwhile, Brent Crude, the global oil benchmark, rose by 1.02% to USD 71.07 per barrel.
In Asian markets, South Korea's Kospi settled 3% higher, while Japan's Nikkei 225 benchmark closed 1% higher. Markets in Hong Kong and mainland China remained closed for the Lunar New Year holidays.
European markets traded lower in the mid-session. The US equities market closed in the green on Wednesday.
Foreign institutional investors bought equities worth Rs 1,154.34 crore on Wednesday, while domestic institutional investors were also net buyers of stocks worth Rs 440.34 crore, according to exchange data.
On Wednesday, the 30-share BSE Sensex jumped by 283.29 points to close at 83,734.25, while the broader NSE Nifty gained 93.95 points to close at 25,819.35.
