Benchmark stock market indices plummeted on Thursday following a decline in investor confidence due to President Donald Trump’s recent remarks about potential military action against Iran. Trump stated that the US would launch severe attacks on Iran in the upcoming weeks, potentially targeting their oil infrastructure. Despite this, he also mentioned that diplomatic discussions are ongoing. The S&P BSE Sensex dropped 1,401.01 points to 71,733.32, while the NSE Nifty50 fell 439.55 points to 22,239.85 by 9:27 am.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted that Trump’s statements had negatively impacted market sentiment, causing Brent crude prices to surge by approximately 5% to $105 and pushing the US 10-year bond yield to 4.36 percent. This led to slight declines in gold and silver prices. Among early movers, HCL Technologies Ltd was the sole stock in positive territory, rising by 0.08%.
Conversely, Sun Pharmaceutical Industries Ltd experienced the most significant decline, dropping by 4.52%. Other notable losers included Indigo Ltd (-3.93%), Adani Ports and Special Economic Zone Ltd (-3.52%), NTPC Ltd (-3.19%), and Eternal Ltd (-3.13%), indicating widespread weakness in early trading.
Vijaykumar highlighted that Foreign Portfolio Investors (FPIs) continued heavy selling, reaching Rs 8,331 crores on April 1st. Factors such as high crude prices, an expanding trade deficit, concerns about decreasing remittances, and sustained FPI selling were collectively pressuring the rupee despite the RBI’s efforts to restrict dollar futures deals.
While acknowledging Trump’s pledge to act decisively in the coming weeks, Vijaykumar cautioned that due to the President’s inconsistent nature, his statements should not be taken at face value. Additionally, he pointed out that strong March auto sales figures indicate resilience in the sector, potentially supporting auto stocks amid an overall weak market sentiment.