The benchmark stock market indices experienced a notable decline on Tuesday, as concerns over the escalating conflict in the Middle East weighed heavily on investor sentiment in Dalal Street.
At 9:42 am, the S&P Sensex saw a downturn of 316.43 points, settling at 73,083.35, while the NSE Nifty50 witnessed a decline of 76.75 points, resting at 22,195.75.
While most of the broader market indices exhibited mixed trends, with volatility remaining pronounced, the early trading scenario appeared comparatively favorable compared to the preceding day.
However, high-weightage sectoral indices such as Nifty Bank, Nifty Financial Services, and Nifty IT faced significant declines, contributing to substantial losses for investors. Nonetheless, Nifty Oil & Gas bucked the trend by rising over 1% in response to a marginal increase in crude oil prices.
Among the top gainers on the Nifty50 were ONGC, Hero MotoCorp, Nestle India, Coal India, and Maruti. Conversely, notable losers included LTIM, IndusInd Bank, Bajaj Finserv, Bajaj Finance, and Infosys.
The early trade saw a sharp decline in IT stocks amidst diminished hopes of immediate US rate cuts, compounded by concerns surrounding the ongoing geopolitical tensions, which could further dampen the outlook for certain firms.
Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, remarked on the challenging start to Tuesday's trading session, attributing it to weak global cues. He highlighted the impact of higher-than-expected inflation data and reports hinting at potential tensions between Iran and Israel.
Tapse emphasized the significance of China's Q1 GDP data in shaping Asian markets, including Dalal Street, noting that China's GDP growth rate of 5.3% exceeded economists' forecasts.
Furthermore, attention remained focused on Q4 earnings, which had begun to trickle in.
Despite prevailing global uncertainties, Tapse pointed out that crude oil prices had not witnessed a significant uptick, offering a glimmer of hope. He also cited the Indian Meteorological Department's prediction of an 'above-normal' monsoon as a positive development for the markets.
However, Tapse cautioned that consensus anticipates further declines in global stock markets, with technical support for Nifty identified at 22,157.
He outlined a recommended trade strategy of buying on dips for both Nifty and Bank Nifty, with defined stop-loss and target levels, while also highlighting the significance of Vodafone Idea's upcoming FPO and the trading range of 21,700-23,000 for Nifty, as suggested by options data.
