Amidst the increasing unrest in global markets, increasing tension between Iran and America and huge surge in crude oil prices, the Indian market is facing immense pressure today. Reflecting the slowdown in global markets, the Sensex opened with a fall of over 800 points. Nifty fell more than 250 points and slipped below the level of 23,400. Bank Nifty also recorded a decline of 650 points. Heavy selling was seen in big stocks like SBI and HDFC Bank, due to which the pressure on Bank Nifty increased. Heavy selling pressure was seen in banking, NBFC and metal stocks.
US President Donald Trump’s open threats to Iran, as well as rising tensions around the Strait of Hormuz, have further increased investor concerns. The consequences of this situation are clearly visible everywhere, from Asian indices to US futures markets. GIFT Nifty is trading around 23,540 levels with a fall of almost 100 points, while Dow futures are also showing weakness with a fall of 400 points.
Trump’s open warning to Iran
Tension seems to be increasing between America and Iran. Trump has made it clear that if Iran does not take necessary steps soon, “nothing will be left” of this country. This statement by Trump has further increased the tension in the Middle East. Meanwhile, Iran has announced the launch of a new traffic management system to tax ships passing through the Strait of Hormuz. Iran claims that only those countries and ships that cooperate with it will be able to use this route. This path may remain closed for the countries involved in the US-led “Freedom Project”. This development has raised concerns about global trade and oil supply.
Crude oil prices rise due to tension in Hormuz
The increasing tension in the Strait of Hormuz is having the biggest impact on the crude oil market. Since Friday, Brent crude has risen nearly 4%, reaching above $110 a barrel. Market experts fear that if the situation worsens, global supply chains may be disrupted. The far-reaching effects of this tension were clearly visible in markets around the world; For example, indices in Korea and Japan fell by up to 2%. Meanwhile, American markets also closed with heavy losses on Friday. The Dow Jones fell nearly 550 points to its lowest level of the day, while the Nasdaq closed down 400 points.
Bond yield and dollar concerns
The continuous rise in US bond yields is a major cause of concern for the markets. The 10-year US bond yield has reached above 4.6%, a level not seen in almost a year. At the same time, the dollar index strengthened for the fifth consecutive day, reaching above 99.30 – its highest level in six weeks. The combination of rising yields and a stronger dollar has put pressure on risk assets. Its effect was clearly visible in the commodity market also.
Heavy fall in gold, silver and base metals
Huge fluctuations are being seen in the commodity market. There was heavy selling in silver, and it fell by Rs 19,200 to close at Rs 271,900. Gold also fell by Rs 3,400 and closed around Rs 1,58,500. There was massive selling in base metals also. Copper and aluminum closed down 2.5% to 3%, while zinc snapped four consecutive days of gains.
FIIs bought, DIIs sold
Foreign institutional investors (FIIs) were net buyers in the cash market for the second consecutive day. On Friday, FIIs recorded net purchases of Rs 1,523 crore, which included cash market purchases of Rs 1,329 crore. In contrast, domestic institutional investors (DIIs) – after 15 consecutive days of buying – sold shares worth Rs 1,958 crore on Friday.
Focus on stocks with earnings results
On the corporate earnings front, shares of many companies will be in focus. Tata Steel, SAIL, Premier Energy, Amber, Delhivery and Godfrey Phillips have reported strong financial results. In contrast, Power Grid’s performance has been very weak. NHPC has posted good results, while Uno Minda’s results were broadly in line with market expectations. Cochin Shipyard’s performance was mixed. Vodafone Idea has delivered strong results across all metrics. The company also said that its promoters will invest Rs 4,730 crore through preferential warrants. Today in the F&O segment, the market’s focus will be on the results of Astral and IOC.
