Sensex, Nifty down over 1%; West Asian conflicts and 3 other factors weighing on markets today
After heavy falls of up to 1,264 and 345 points, the Sensex and Nifty, respectively, recovered some of their losses as the metal stocks helped make some gains. In part, auto, realty led losses on D-Street.
At last count, the Nifty was down 0.94 percent at 25,555.6, while the Sensex was down 1 percent or 844.78 points at 83,421.51 points.
Here are the possible reasons for today’s market crash:
Growing tensions in the Middle East:
Iran’s attack on Israel increases political tensions and global security threats. The Israeli strike in the central area of Beirut in Bachoura on Thursday morning left two people injured and 11 injured, the Ministry of Health in Lebanon said in a statement.
Crude price rises:
Amid rising political tensions, prices rose and moved higher in Thursday’s session. There is also an expected disruption of crude flows following this ongoing crisis. Brent crude futures were up 64 cents, or 0.87 percent, at $74.54 a barrel as of 0006 GMT. US West Texas Intermediate crude futures gained 72 cents, or 1.03 percent, to $70.82 a barrel.
The high crude price indicates that it is bad for India Inc. as it results in a higher deficit of the company’s account.
“However, the situation will change if Israel attacks any oil installation in Iran which will cause a big dirty spike. If it happens, it will be very dangerous for those who buy oil like India. Therefore, investors should watch the growing situation. very closely, ” said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Also, the higher price will have a negative effect on the inflation and make it difficult for the central banks of the world to reduce inflation.
Global markets:
The current geo-political crisis is weighing on the world as the Hang Seng dropped 3 percent after China’s massive bullishness continued. Still, Japan’s Nikkei was up about 2 percent.
Technology:
Anand James, Chief Market Strategist, Geojit Financial Services on the Nifty outlook noted that while we are playing for the pullback on Monday, we have pegged our expectations at 25945. Incidentally, Nifty had to peek above 25900 to attract bears.
However, we are not yet convinced that the pullback trade is over, and we prefer to extend the expectation to 26150. Alternatively, the inability to finish the day above 25970 could indicate that the 25600-24600 dip we had penciled in earlier in the day. a week, now it will get a higher base to be launched, he added.
