Indian equity indices experienced a sharp decline on Thursday, reflecting weak global cues amid rising tensions in the Middle East, particularly concerns over potential conflict between Iran and Israel.
As of 9:38 AM, the Sensex fell by 589 points (0.69%) to settle at 83,686, while the Nifty dropped 174 points (0.68%) to 25,622.
Early trading indicated a grim outlook for broader market trends, with only 256 stocks advancing against 1,188 declining on the National Stock Exchange (NSE).
A staggering 28 out of 30 Sensex constituents were trading in the red, with major losses reported by Wipro, Asian Paints, Tata Motors, Mahindra & Mahindra, Maruti Suzuki, Reliance, Nestle, ICICI Bank, Titan, TCS, L&T, Hindustan Unilever, Kotak Mahindra Bank, HDFC Bank, Bajaj Finserv, and Axis Bank. Only JSW Steel and Tata Steel managed to remain in positive territory.
Sector-wise, while the auto, FMCG, real estate, media, energy, and private banking indices saw some gains, the metal index was notably the only one in the green amidst the turmoil.
Mixed trading patterns characterized Asian markets, with Tokyo and Taipei showing slight gains, while Hong Kong, Bangkok, Seoul, and Jakarta saw declines.
In the United States, stock markets closed modestly higher on Wednesday. The tech-heavy Nasdaq Composite rose 0.08%, while both the S&P 500 and the Dow Jones Industrial Average edged up by 0.01% and 0.09%, respectively.
Market analysts warn that the situation could drastically shift if Israel were to target any oil facilities in Iran, potentially triggering a significant spike in crude oil prices.
Such a development could be particularly detrimental for oil-importing nations like India. Investors are advised to monitor the evolving situation closely, with some suggesting a strategic pivot towards defensive sectors like pharmaceuticals and FMCG.
On the institutional investment front, foreign institutional investors (FIIs) continued their selling spree, offloading equities worth Rs 5,579 crore on 1 October.
In contrast, domestic institutional investors (DIIs) stepped up their buying, purchasing equities worth Rs 4,609 crore on the same day, indicating a divergence in market sentiment.
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