Stock Market Today: Sensex Drops 573 Points, Nifty Slips Below 24,750 Weighed Down By Israel-Iran Conflict

Indian stock markets closed lower on Friday after news of Israel's strikes on Iran rattled investor confidence. Both benchmarks, Sensex and Nifty, dropped by nearly 1% each. Profit booking emerged in Banking and FMCG stocks, making them top draggers of the market.

After the closing bell, Sensex dropped 573 points, or 0.70%, to end at 81,118.60, while the Nifty fell 169.60 points, or 0.68%, to close at 24,718.60. Bank Nifty also declined, closing at 55,527.35, down by 555.20 points or 0.99%. In contrast, the Nifty India Defence outperformed the major indices, finishing higher at 8791.60, up 131 points or 1.51%.

Market breadth remained weak, with 2,326 stocks declining and only 1,520 advancing. Another 124 stocks remained unchanged.

'The initial reaction was largely driven by a sharp rise in crude oil prices due to geopolitical tensions in the Middle East. However, a moderation in CPI inflation helped limit the downside. On the technical front, the Nifty slipped below its short-term moving average (20 DEMA) once again but witnessed a swift rebound after testing the lower end of the recent consolidation range (24,500-25,200). This suggests a possibility of continued consolidation in the index,' said Ajit Mishra, SVP, Research, Religare Broking.

"Given the prevailing scenario, traders should maintain a balanced approach with positions on both sides, focusing on stock selection driven by sectoral and thematic trends. It is advisable to avoid aggressive bets and manage risk prudently," added Ajit Misra of Religare Broking.

Top Gainers and Losers

Adani Ports, ITC, SBI, IndusInd Bank, and Hindalco were the biggest losers on the Nifty index. On the other hand, Bharat Electronics, ONGC, Tech Mahindra, TCS, and Wipro ended with gains.

Most sectors followed the market's downward trend. FMCG and banking stocks were hit the hardest. Only the media, realty and healthcare sectors managed to avoid losses. FMCG, PSU banks, oil & gas, power, and telecom stocks fell between 0.5% and 1%.

Midcap and smallcap indices also came under pressure, each dropping 0.3%.

"Indian equity benchmarks experienced downward pressure, driven by weak global cues and foreign institutional outflows. Market sentiment was notably impacted by heightened geopolitical tensions following Israel's military strike on Iran, which significantly increased risk aversion among investors. Although India's CPI for May eased below the RBI's comfort threshold, offering a positive macro signal, this was largely overshadowed by external headwinds," noted Vinod Nair, Head of Research, Geojit Investments.

"Brent crude prices climbed near $76/barrel, their highest this year, raising fears of inflation if tensions persist. Gold demand remains strong, reflecting a shift to safe-haven assets. In the near term, market sentiment is likely to stay cautious until geopolitical stability returns," added Vinod Nair of Geojit Investments.

Tensions in the Middle East and global uncertainty continue to weigh on investor sentiment, driving cautious trading across the board.

Impact on Rupee VS Dollar

Indian rupee ended 49 paise lower at 86.09 per dollar on Friday versus Thursday's close of 85.60.
"The Indian Rupee has experienced a notable depreciation against US dollar and one of the worst performer among Asian currencies. This decline is primarily attributable to substantial outflows of foreign funds, a pervasive risk-averse market sentiment, elevated global crude oil prices, and the strengthening of the US Dollar as a safe-haven asset after Israel air strike on Iran," noted Dilip Parmar - Senior Research Analyst, HDFC Securities.

Near-term market attention will be directed towards geopolitical developments over the weekend and the impending monetary policy decisions by three major central banks next week.

"The bias for the USD/INR pair remains supportive, driven by sustained haven demand for the US Dollar and anticipated dollar demand from oil importers. Technically, the pair has support," concluded Dilip Parmar of HDFC Securities.