Sensex Crashes Over 1,500 Points, Nifty Below 25,290 Amid Middle East Tensions
Broader markets reflected the downturn, with the BSE Midcap and Smallcap indices both dropping over 2 per cent
The Sensex and Nifty 50 continued their downward trend during intra-day trading on Thursday, as rising concerns over the escalating conflict in the Middle East prompted a widespread selloff across sectors. Around noon, the Sensex had dropped 1,507.34 points, or 1.79 per cent, to 82,758.95, while the Nifty fell 508.40 points, or 1.97 per cent, to 25,288.50.
Crude oil prices spiked amid these tensions, heightening fears of potential supply disruptions from this critical oil-producing region. The increase in oil prices presents challenges for importers like India, where crude oil constitutes a significant portion of the import bill.
Additionally, SEBI has tightened regulations on equity derivatives trading, raising entry barriers and increasing costs for traders.
Following China’s announcement of a stimulus package to revitalise its struggling economy, foreign institutional investors (FIIs) are expected to continue selling Indian equities in favour of the more affordable Chinese market.
Broader markets reflected the decline, with the BSE Midcap and Smallcap indices dropping as much as 2 per cent. At the same time, volatility surged, with the India VIX—the market’s fear gauge—jumping over 12 per cent to 13.4, signaling increased market anxiety.
Investors are now focused on US jobless claims data set to be released today, along with the non-farm payrolls report scheduled for October 4.
V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the market had overlooked the deteriorating situation in the Middle East. He suggested that there is a prevailing belief that the conflict between Israel and Iran is unlikely to affect economies or corporate earnings significantly.
"However, the situation will change if Israel attacks any oil installations in Iran which will trigger a huge spike in crude. If it happens, it can turn out to be more damaging for oil importers like India. Therefore, investors should watch the emerging situation very closely. A partial switch in portfolios to defensives like Pharma and FMCG also can be thought of," Vijayakumar added.
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