Benchmark stock market indices started the day steady on Thursday before declining due to increasing uncertainty surrounding the Iran conflict, impacting investor confidence. Oil prices surged past $100 per barrel, contributing to a cautious market atmosphere.
The S&P BSE Sensex fell by 382.67 points to 72,936.88, while the NSE Nifty50 dropped by 84.90 points to 22,628.20 at 9:29 am.
Chief Investment Strategist at Geojit Investments Limited, Dr. VK Vijayakumar, mentioned that market volatility is expected to persist given the ongoing tensions in West Asia. Investors are likely to react swiftly to any positive or negative developments.
Vijayakumar emphasized the significant potential for further escalation in the following days. Market watchers will closely monitor crude oil price movements in response to war-related events. He also noted that reopening the Hormuz Strait could trigger a positive market reaction even amidst the ongoing conflict.
Early trading saw heightened volatility, with mixed trends across the broader market. Gainers included Trent Ltd (+4.18%), Tech Mahindra Ltd (+1.54%), Titan Company Ltd (+1.39%), Infosys Ltd (+1.12%), and Power Grid Corporation of India Ltd (+0.91%). On the other hand, Kotak Mahindra Bank Ltd (-2.12%), Indigo Ltd (-1.89%), Reliance Industries Ltd (-1.89%), and Sun Pharmaceutical Industries Ltd (-1.64%) experienced declines.
Certain sectors show promise despite the overall weak market performance. The IT sector has shown strength, buoyed by expectations of favorable Q4 results and advantages from the rupee’s devaluation.
Vijayakumar pointed out potential opportunities for long-term investors in banking stocks. The recent sharp corrections, particularly in private sector banks, have been mainly due to continuous selling by foreign institutional investors. Nevertheless, the sector’s fundamentals remain robust, with positive signs of healthy deposit and credit growth.
For patient investors, considering banking stocks for potential gains as the market stabilizes is advised. Market participants should be prepared for volatility driven by geopolitical tensions and keep an eye on sector-specific trends for investment prospects.