Daijiworld Media Network - Mumbai
Mumbai, Jun 23: Indian stock markets began the week on a weak footing as investors reacted nervously to the United States' airstrikes on three Iranian nuclear sites over the weekend, signaling firm support for Israel in the escalating regional conflict. The heightened geopolitical risk led to a broad sell-off in benchmark indices.
The BSE Sensex declined by 511.38 points, or 0.62%, closing at 81,896.79 after fluctuating between an intraday high of 82,169.67 and a low of 81,476.76. The Nifty 50 followed suit, falling 140.50 points, or 0.56%, to settle at 24,971.90, after hitting a high of 25,057 and a low of 24,824.85 during the day.
Despite the drag on blue-chip stocks, the broader market fared better. The Nifty Midcap 100 rose 0.36%, while the Smallcap 100 added 0.70%, suggesting that investors rotated into mid- and small-cap names amid the large-cap volatility.
Among Sensex constituents, the biggest losers included HCL Tech, Infosys, Larsen & Toubro, Mahindra & Mahindra, Hindustan Unilever, and ITC, with declines ranging from 1.21% to 2.28%. In contrast, Trent, Bharat Electronics, Bajaj Finance, Kotak Mahindra Bank, and Bajaj Finserv posted gains between 0.58% and 3.39%.
Sectoral performance was mixed. IT stocks led the decline, with the Nifty IT index dropping 1.48%, weighed down by Coforge and Persistent Systems. Meanwhile, metal, pharma, consumer durables, and media stocks posted moderate gains, while banking, auto, FMCG, and realty sectors ended lower.
Market sentiment had improved late last week on hopes that tensions in the Middle East might ease following the US announcement of a two-week window to assess its involvement. However, the unexpected escalation over the weekend upended those expectations. Vinod Nair of Geojit Financial Services said the strikes pushed crude oil prices higher and triggered a wave of caution in the Indian equity market.
Volatility spiked, with India VIX rising 2.74% to 14.05, reflecting increased nervousness among traders and investors. The Indian rupee also slipped, weakening by 0.11% to close at 86.75 against the US dollar. With the dollar index nearing the 99 mark, analysts warned of more weakness ahead. Jateen Trivedi of LKP Securities noted that the rupee remains vulnerable below the 86 level, with the next technical support around 87.
Although a mid-session pullback in crude prices helped markets recover from morning lows, the broader sentiment remained cautious amid the uncertainty triggered by rising geopolitical risks.