Markets Slip: Sensex Falls Over 700 Points Amid Renewed West Asia Tensions

Indian equity benchmarks opened lower on Thursday, tracking mixed cues from global markets amid renewed uncertainty around the fragile US-Iran ceasefire.

The 30-share BSE Sensex dropped 243.57 points to 77,319.33 in opening trade. The 50-share NSE Nifty declined 88.3 points to 23,909.05.

Later, the BSE benchmark quoted 728.93 points lower at 76,833.97, and the Nifty tumbled 189.55 points to 23,821.45.

From the 30-Sensex firms, Infosys, Adani Ports, InterGlobe Aviation, HDFC Bank, Bajaj Finance and ICICI Bank were among the major laggards.

NTPC, Bharat Electronics, Tata Steel and Power Grid were among the gainers.

The downward movement in domestic equities mirrored a general slump across the Asian region, with Japan's Nikkei 225 dropping 393.42 points and South Korea's KOSPI sliding 90.27 points, representing a 1.54 per cent decline.

The Hang Seng in Hong Kong and the Shanghai Composite in China recorded marginal losses, while the SET Composite in Thailand remained a lone outlier, trading with minor gains.

The previous sessions saw a substantial recovery, which experts attribute to specific geopolitical shifts and domestic policy signals.

How Did Crude Price Movements and Financial Stocks Drive Market Volatility?

"The two-week ceasefire between the US and Iran and the consequent sharp decline in crude prices provided the trigger for a sharp 873-point rally in Nifty yesterday,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

Speaking about the impact of recent regulatory updates, Vijayakumar noted that the latest monetary policy from the Reserve Bank of India met general expectations.

He indicated that while the lack of change in rates did not provide a direct boost, the underlying economic outlook remains positive.

"Even though RBI's monetary policy on expected lines with no change in rates and stance was not market boosting, the Governor's comment that 'growth impulses remain strong supported by robust private consumption and sustained investment demand' augurs well for the market," Vijayakumar stated.

Can Sensex and Nifty Stay Resilient on Strong GDP Growth and RBI Projections?

He pointed toward long-term growth projections as a source of potential resilience for the indices.

"With 6.9% GDP growth and 4.6% inflation projected for FY 27 by the RBI, the nominal GDP growth for FY27 can be around 11.5% which can deliver around 12% earnings growth in FY 27. With fair valuations in the market now, if the West Asian ceasefire holds, the market will remain resilient," he added.

However, investors still remain cautious about emerging geopolitical tensions in West Asia.

"There are some concerns surrounding the Israeli attack on Lebanon and its fallout on the ceasefire,” Vijayakumar said.

“If crude again spikes in response to this development, the uptrend witnessed yesterday will be at risk of losing stream. The big takeaway from the rally in the market yesterday is that fairly valued stocks depressed by FPI selling and shorting will bounce back at anytime. Patience is the key," he added.

In the commodities space, gold prices climbed nearly 2 per cent to around $4,790 per ounce, hitting their highest level since mid-March, as investors recalibrated inflation expectations amid easing energy supply concerns.

Meanwhile, Brent crude prices rebounded nearly 2 per cent to trade above $97 per barrel on Thursday, after Iran's fresh accusations against the U.S. reignited fears of potential disruptions to global oil supplies if tensions escalate again.

(With inputs from ANI)