Indian stock market has reacted to the latest tensions in the Middle East after a 1-day gap from global markets' reaction. On Thursday, October 3, 2024, Sensex nosedived by 1,264.2 points to hit an intraday low of 83,002.09, while Nifty shed over 345 points to touch an intraday low of 25,451.60. All sectoral indices are in red with most sharpest decline seen in auto stocks. Due to broad-based selling pressure, over Rs 2.87 lakh crore wealth has been wiped out in less than 60 minutes.
Sensex, Nifty's Less Than 60 Minutes Erosion:
Sensex opened at its intraday low of 83,002.09, compared to the previous session's print of 84,266.29. Nifty opened near its day's low of 25,451.60 to 25,452.85.
Currently, both benchmarks are trading down by 1%.
At the moment, BSE-listed companies' market value was at Rs 4,71,05,602.84 crore at around 10.05 AM, nosediving by a massive Rs 3,80,860.81 crore. On October 1, Tuesday, the market cap is at Rs 4,74,86,463.65 crore.
Why Market Is Down Today?
Selling pressure escalated in Indian equities despite mixed Asian cues. The reason is broad-based selloff with stocks-specific action.
1. BSE Auto index nosedived by 1,437 points with stocks like Eicher Motors, Tata Motors, Bajaj Auto, Hero MotoCorp, Bajaj Auto, and Maruti Suzuki down by 1-4%. As per Motilal Oswal, the festive start for the auto industry has been much weaker than expected and one needs to monitor the festive momentum closely.
2. Midcap-Smallcap Trapped In Bear Bandwagon: Amidst selloffs of large-caps, midcap and small-cap stocks failed to escape the market trend. BSE Midcap dipped by 405 points, and BSE Smallcap shed 504 points.
3. Crude Oil Prices Continue To Rise: WTI crude oil futures jumped towards $71 per barrel in the early hours of Thursday, extending its third-consecutive gains, owing to concerns over potential supply risks amid the escalating Middle East conflict.
Rahul Kalantri, VP of Commodities, Mehta Equities said, "Israel's threat of retaliation, particularly if it targets Iran's oil infrastructure, could further support rising prices. Meanwhile, OPEC+ concluded its meetings this week, reaffirming its plan to increase output from December. The U.S. crude oil inventories rose once again, according to the U.S. EIA report released on Wednesday. Stocks increased by 3.9 million barrels, contrary to expectations of a 1.5 million barrel decline, which has tempered crude oil gains. We anticipate crude oil prices will remain volatile in today's session. Key support levels for crude oil are at $69.55-68.90, with resistance at $71.70-72.40. In INR terms, support is at ₹5,880-5,800, while resistance stands at ₹6,050-6,140."
4. Geopolitical Tensions: Brokerage StoxKart said, geopolitical tensions in the Middle East have spiked following Iran's missile attack on Israel on October 1. Israel's subsequent ground incursions into Lebanon targeting Hezbollah, an Iran-backed militia group, have exacerbated concerns about potential oil supply disruptions and increased uncertainty in global financial markets.
5. Global Market: As per StoxKart, the Asian stock market exhibited mixed trends on Thursday, mirroring a cautious sentiment across global markets amid escalating tensions in the Middle East. Japan's Nikkei 225 surged over 2%, while markets in China and South Korea remained closed for a holiday. While In the United States, stock markets closed with modest gains on Wednesday.
StoxKart highlighted that the US job market's resilience was further underscored by the unexpected increase in job openings in August. The Job Openings and Labor Turnover Survey (JOLTS) revealed a rebound of 329,000 job openings, exceeding analysts' expectations. While hiring declined slightly, layoffs decreased.
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