Sensex and Nifty News: Market Volatility Grips Dalal Street as Geopolitical Tensions Rise

Market Performance

On Monday, June 23, Indian equity benchmarks took a sharp hit in early trade but managed to recoup some losses by the end of the session.

• Sensex opened at 81,704.07, down from its previous close of 82,408.17
• Nifty 50 started at 24,939.75, compared to the earlier close of 25,112.40
• Intraday lows:
  • Sensex: 81,476.76 (drop of over 900 points)
  • Nifty 50: 24,824.85
• Closing figures:
  • Sensex ended at 81,896.79, down 511 points or 0.62%
  • Nifty 50 closed at 24,971.90, down 141 points or 0.56%

Despite the weak start, the broader market indices bucked the trend:

• BSE Midcap index gained 0.20%
• BSE Smallcap index advanced 0.57%
• Overall, the BSE market cap remained near ₹448 lakh Crore

Main News

Escalating Israel-Iran Tensions

• The US launched airstrikes on three Iranian nuclear facilities over the weekend
• The move reignited fears of a prolonged geopolitical conflict
• Market sentiment took a hit as investors grew wary of the situation's impact on oil prices and regional stability

Strait of Hormuz in Focus

• Reports suggest Iran's Supreme National Security Council may close the Strait of Hormuz
• Nearly 20% of the global oil supply passes through this critical waterway
• Potential closure could trigger a global oil supply shock and negatively affect major oil importers like India

Crude Oil Nears $80 Per Barrel.

• Brent crude surged over 2% to trade at ~$79/barrel
• Concerns over supply disruption due to rising Middle East tensions were the key driver
• The rupee weakened by 17 paise, closing at ₹86.72 per USD

Dollar Index Rises

• The US dollar index climbed 0.5%, pushing investors toward safer assets
• This raised the risk of capital outflows from emerging markets like India

Global Developments Challenge India's Growth Narrative

• India's economy, though largely domestic-driven, is now facing external pressure
• Ongoing geopolitical issues such as Russia-Ukraine, Israel-Hamas, and Israel-Iran are seen as persistent threats
• Trade tensions and tariff uncertainties further complicate the global economic landscape

Company Details and Sectoral Performance

Technology Sector

• Nifty IT index fell over 1.4%
• The decline followed Accenture's lower guidance and rising global tech sector uncertainty

Auto Sector

• Auto stocks slipped around 1%
• India's Transport Ministry has made anti-lock braking systems (ABS) mandatory for all new two-wheelers
• Market participants anticipate a potential 2–4% demand dip in the two-wheeler segment

Defense Stocks Gain

• With tensions escalating, defense stocks surged
• Nifty India Defence Index rose over 2%
• Top gainers included:
  • Garden Reach Shipbuilders
  • Zen Technologies (up to 7% rise)

Media Stocks Rally

• The Nifty Media Index jumped 4%+
• Led by Zee Entertainment, which is strategizing to expand viewership and improve profitability

Volatility Index Spikes

• India VIX rose over 5% intraday, settling at 14.09, up 2%
• Signaled increased market uncertainty and risk-off mood among investors

Summary of the Article

The Indian stock market began the week on a shaky note, with the Sensex falling 511 points and the Nifty slipping 141 points, mainly due to heightened geopolitical risks. While broader indices, such as midcaps and small caps, fared better, the overarching sentiment remained cautious.

Key drivers of the downturn included:

• Rising tensions between Israel and Iran
• Fears of oil supply disruption through the Strait of Hormuz
• Crude oil prices nearing $80, hurting India's import bill
• A strengthening dollar triggering foreign capital concerns

Sector-wise, IT and Auto were the major laggards, whereas Defence and Media stocks offered a silver lining.

The situation remains dynamic, with global factors continuing to impact domestic equities significantly. Currently, markets are in a consolidation phase, reacting sharply to any international developments.