Benchmark indices Sensex and Nifty took a beating and so did shares of brokerages such as Angel One Ltd and SMC Global Securities Ltd, among others, as futures & options(F&O) measures announced by SEBI are seen hitting retail participation in the stock market. Geopolitical concerns following Iran's official entry into the war in the Middle East, with missile launches on Israel, has flared up tensions, sending crude prices soaring. That also contributed to the market fall. The recent surge in Chinese stocks, fears of Japan looking to hike interest rates and rich stock valuations at home are other factors weighing on the market sentiment today.
The BSE Sensex fell nearly 1,300 points in early trade and barely managed to hold up the 83,000-mark. Nifty was down over 1.3 per cent at 25,452.85, down 344.05 points or 1.33 per cent. Angel One shares fell 3 per cent, while those of Motilal Oswal Financial Services Ltd, SMC Securities and IIFL Securities declined up to 5 per cent each.
Fear gauge India VIX spiked 9.07 per cent to 13.08, suggesting volatility in the market over the next 30 days. Shares of BSE, meanwhile, climbed 2.99 per cent to 3,974.30, as the bourse is seen taking lesser hit than NSE.
A total of 2,179 actively stocks fell and only 885 advanced amid the broader selloff. A total of 67 stocks hit their lower circuit limits; 41 touched their 52-week lows
Mahindra & Mahindra (M&M), Asian Paints, Tata Motors, Maruti Suzuki, Power Grid and Larsen & Toubro (L&T) led the Sensex losers, falling up to 2.23 per cent. ICICI Bank, Reliance Industries Ltd, Kotak Mahindra Bank, TCS and Bajaj Finserv fell over 1 per cent each.V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said the market had so far ignored the worsening situation in the Middle East. The steady US market yesterday signals the market’s belief that the conflict between Israel and Iran is unlikely to impact economies and corporate earnings.
"However, the situation will change if Israel attacks any oil installations in Iran which will trigger a huge spike in crude. If it happens, it can turn out to be more damaging for oil importers like India. Therefore, investors should watch the emerging situation very closely. A partial switch in portfolios to defensives like Pharma and FMCG also can be thought of," Vijayakumar said.
The analysts said FPIs may continue to sell since Chinese stocks have turned bullish and a lot of money is moving into the Hong Kong market, which continues to be cheap relative to the high valuations in India.