Stock mkts tumbles on ceasefire uncertainty; Sensex drops 931 pts

Equity Rout | Banking and IT stocks drag indices lower; FII outflows weigh

PTI

New Delhi

Equity benchmark indices Sensex and Nifty buckled under heavy selling pressure to close with deep cuts on Thursday after investors pared exposure to financial, banking, and IT stocks as renewed tensions in West Asia faded the ceasefire-led optimism.

Weak trends in Asian and European markets, a jump in crude oil prices and uninterrupted foreign fund outflows also made investors jittery in the domestic market.

Snapping its five-session winning run, the 30-share BSE Sensex dropped 931.25 points or 1.2% to settle at 76,631.65. During the day, it dived 1,215 points or 1.56% to 76,347.90. The 50-share NSE Nifty declined 222.25 points or 0.93% to end at 23,775.10.

The ceasefire deal appeared to be at risk after Iran closed the Strait of Hormuz again in response to Israeli attacks on Lebanon.

"After Wednesday's relief rally following the ceasefire announcement, domestic markets ended the volatile session in the red, driven by ceasefire uncertainty. Markets followed global cues as most of the markets ended in red due to crude oil gains and global uncertainty. Focus now will be on domestic company earnings, and sectors getting impacted due to surging crude prices. Investors will wait for more clarity on whether the ceasefire will translate into meaningful discussion and help end the war before taking any major equity exposure," Equirus Wealth Managing Director and Business Head Ankur Punj said.

From the 30-Sensex firms, InterGlobe Aviation, Larsen & Toubro, Eternal, HDFC Bank, ICICI Bank and Kotak Mahindra Bank were among the major laggards. On the other hand, Bharat Electronics, Power Grid, NTPC and Tata Consultancy Services were among the gainers.

The BSE SmallCap Select index climbed 0.26%, and the MidCap Select index went up by 0.15%. Among sectoral indices, BSE Top 10 Banks tumbled 1.86%, Private Banks index (1.75%), Bankex (1.58%), Financial Services (1.41%), PSU Bank (1.21%), Services (1.04%) and MidSmall Private Banks Quality Tilt (0.88%). However, Capital Goods jumped 1.64%, Metal (1.30%), Power (1.27%), Hospitals (0.75%), Healthcare (0.74%), Utilities (0.69%), Telecommunication (0.42%).

In Asian markets, South Korea's benchmark Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index ended lower after a sharp rally in the previous trade. European markets were quoting in the negative territory in mid-session deals.

"Ceasefire-led optimism faded as renewed US-Iran tensions and ongoing restrictions at the Strait of Hormuz pushed crude back up, reviving concerns around India’s inflation. Domestically, profit-booking, rising 10-year bond yields, and rupee weakness reduced near-term risk appetite. Financials led the decline after the previous session's sharp rally amid sustained FII selling, while broader markets held relatively steady," Geojit Investments Limited Head of Research Vinod Nair said.