Market close: Nifty 50, Sensex snap 2-day winning run; investors lose about ₹4 lakh crore in a day

Nifty 50 today: Key equity indices the Nifty 50 and the Sensex ended with significant losses on Monday, snapping their two-day winning run as the ongoing Israel-Palestine war spooked investors.

Israel declared war against Hamas after its fighters breached the border from Gaza in a surprise attack on Saturday that killed nearly 1,000 people and wounded several others.

The Israel-Palestine war dealt a blow to market sentiment as it boosted global crude oil prices. Crude oil prices saw a sharp rise on Monday as concerns over supplies grew stronger thanks to the ongoing military clashes between Israel and the Palestinian Islamist group Hamas. Brent Crude prices rose over $3 per barrel to trade near the $87 per barrel mark in Monday's trade.

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Nifty 50 opened at 19,539.45 against the previous close of 19,653.50 and fell 0.90 per cent to the day's low of 19,480.50 while the Sensex opened at 65,560.07 against the previous close of 65,995.63 and fell 0.85 per cent to the day's low of 65,434.61 in Monday's trade.

Nifty 50 finally closed at 19,512.35, down 141 points, or 0.72 per cent. The Sensex ended the day with a loss of 483 points, or 0.73 per cent, at 65,512.39.

The selloff was more intense in the mid and smallcap spaces as the BSE Midcap index closed with a loss of 1.22 per cent while the Smallcap index fell 1.72 per cent.

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The overall market capitalisation of the firms listed on the BSE dropped to nearly ₹316 lakh crore from ₹319.9 lakh crore in the previous session, making investors poorer by about ₹3.9 lakh crore in a single session.

Also Read: Nifty 50, Sensex decline on Israel-Hamas war: 5 factors that weigh on market sentiment

Meanwhile, crude oil prices traded over 3 per cent higher near the $87 per barrel mark around 3:45 pm.

G. Chokkalingam, founder and head of research at Equinomics Research believes the ongoing battle in Israel may not lead to oil breaching the $100 per barrel mark. But it is possible if the ongoing conflict in Israel spreads across West Asia.

"Both warring groups have much smaller populations and also smaller areas and their war and therefore, their demand for oil will not be large enough to trigger oil prices," said Chokkalingam.

Top Nifty losers today

As many as 43 stocks suffered losses in the Nifty 50 index today.

Shares of Adani Ports (down 5.09 per cent), HDFC Life Insurance Company (down 2.68 per cent) and Hero MotoCorp (down 2.50 per cent) ended as the top losers in the Nifty index.

Top Nifty gainers today

Shares of Dr. Reddy's Laboratories (up 1.13 per cent), HCL Tech (up 0.94 per cent) and Tata Consumer Products (up 0.56 per cent) closed as the top gainers in the Nifty pack.

Also Read: Israel-Palestine War: Impact on global economy, India-Israel trade, financial markets

Sectoral indices today

Among the sectoral indices, Nifty PSU Bank plunged 3.09 per cent, followed by the media index which fell 2.18 per cent.

Most sectoral indices, including Nifty Consumer Durables (down 1.47 per cent), Metal (down 1.44 per cent), Financial Services (down 1.13 per cent), Nifty Bank (down 1.07 per cent), Oil & Gas (down 1.06 per cent), Private Bank (down 0.99 per cent) and Auto (down 0.99 per cent) lost significantly.

Experts' views on markets

Shrikant Chouhan, Head of Research (Retail) at Kotak Securities observed that investors dumped equity assets as they turned risk off on concerns that a faceoff between Israel and Hamas could further deteriorate the global economy already reeling under higher interest rates and stubbornly high inflation.

"There are concerns that since most of the oil-producing nations are close to the conflict zone, a prolonged war could trigger an upsurge in international crude oil prices. With a fresh surge in crude oil prices, higher oil import bills going ahead would stoke domestic inflation and prompt the central bank to take a hawkish stance. With investors preferring gold and dollar assets in times of uncertainty, local stocks across the board came under severe hammering even as indices in the Asian region ended mixed," said Chouhan.

"An unforeseen escalation in the Middle East has rekindled pessimism in global markets. Moreover, the rapid surge in oil prices presents a significant threat to the global market, which is already dealing with elevated inflation and interest rates," said Vinod Nair, Head of Research at Geojit Financial Services.

"In the mid-and small-cap segments, we observe consolidation as investors reshuffle their portfolios due to premium valuations in this space. Among sectors, financials and consumer discretionary sectors notably underperformed, primarily due to concerns regarding earnings vulnerability if inflation continues to rise. Conversely, the IT sector is displaying signs of returning to normalcy. While consensus estimates for Q2FY24 remain positive, it's important to note that geopolitical tensions could potentially disrupt this optimistic outlook," said Nair.

Technical views on Nifty 50

As per Chouhan, the Nifty traded below the 50-day SMA (simple moving average) or 19,605 which would be the immediate resistance zone. Above the same, the index could move up to 19,700-19,725 levels. While 19,480 could be the crucial support zone for the traders, below this, it could retest the level of 19,400-19,390, said Chouhan.

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas believes that the Nifty is in the process of retracing the rise it witnessed from 19,333 to 19,676.

"On the way down, support is placed in the zone 19,500 - 19,460 which coincides with the gap area formed on October 5 and the 61.82 per cent Fibonacci retracement level. The Nifty is likely to resume its next leg of up move from the support zone and hence in case of a gap down opening or a dip it should be used as a buying opportunity," said Gedia.

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