Domestic equity markets faced a significant decline on Tuesday morning due to escalating geopolitical tensions between the US and Iran. Sensex dropped by 0.67% or 524 points to 76,745, while Nifty fell to 23,949, a decrease of 0.7% or 170 points. The sectors experiencing selling pressure included auto, financials, banking, consumer durables, and metal stocks, with indices like Nifty Auto and Nifty Metal declining by up to 0.7%.
Market laggards from the 50-share basket comprised companies like Shriram Finance, Bajaj Finance, Maruti Suzuki, Eicher Motors, and others. Conversely, Nifty IT and Nifty FMCG observed positive momentum amidst the market turbulence. The India VIX, a volatility tracker, rose over 2% to approximately 19, reflecting increased market uncertainty.
The heightened market jitters were a result of renewed tensions in West Asia between the US and Iran, with naval blockades in the Strait of Hormuz escalating the situation. An expert noted that the market’s direction would be influenced by developments in West Asia, particularly in the Strait of Hormuz, as well as factors like rising US 10-year bond yields and a depreciating rupee affecting FPI flows.
The recent exchange of missiles and drone fire in the region followed efforts by US President Donald Trump to assist stranded tankers through the critical Strait of Hormuz. This conflict, ongoing for three months, has led to numerous casualties. In the commodities market, Brent crude dropped by 1.36% to $112.88 per barrel, while US WTI fell more sharply to $103.92 per barrel. Globally, Asian markets displayed mixed trends, with Hong Kong’s Hang Seng declining over 1%, Japan’s Nikkei slightly rising, and South Korea’s KOSPI remaining stable. In the US, the S&P 500 closed 0.41% lower, and the Nasdaq dipped by 0.20%.
