Indian Stock Market Declines Amid Middle East Tensions and New Trading Norms

On Thursday, October 3, 2024, Indian equity benchmark indices, BSE Sensex and Nifty 50, opened lower amidst rising geopolitical tensions in the Middle East and newly implemented norms for trading in index derivatives. At the opening bell, the BSE Sensex registered 83,561, a decline of 704 points or 0.84 percent, while the Nifty 50 stood at 25,565, down by 231 points or 0.9 percent.

Throughout the session, JSW Steel, rising by 1.66 percent, and Tata Steel were the only stocks gaining on the BSE Sensex as the rest traded in the negative. Leading the losses were Mahindra & Mahindra with a 2.23 percent drop, followed by Asian Paints, Tata Motors, Maruti Suzuki India, and Power Grid Corporation. Hindalco Industries, with a modest increase of 0.66 percent, was the sole gainer on the Nifty 50 index.

Sectoral indices, with the exception of Metal, were largely in the red. The Auto sector declined by 1.55 percent, Realty fell by 1.48 percent, and FMCG saw a downturn of 1.07 percent. Major indices such as Nifty Bank, Financial Services, IT, Consumer Durables, and Oil & Gas also decreased around one percent each. The broader BSE SmallCap index fell by 1.09 percent and the BSE MidCap index saw a reduction of 1.14 percent.

Globally, Asian markets provided a mixed response. Japanese markets showed strength with the Nikkei 225 rising by 2.21 percent, buoyed by a modest Wall Street upturn despite ongoing Middle East issues. The Hang Seng in Hong Kong dropped 2.35 percent, while Australia’s S&P/ASX 200 showed a marginal decrease of 0.07 percent.

Geopolitically, tensions escalated as Iran’s missile attack on Israel led to heightened concerns over oil supply threats from the region. This uncertainty impacted global financial markets. U.S. President Joe Biden cautioned Israel against a disproportionate response to Iran, following their attack on Israel on Tuesday.

In related news, oil prices experienced fluctuations with Brent crude closing at $73.90 per barrel, marking a 0.46 percent increase, while U.S. crude saw a 0.39 percent rise to $70.10 a barrel.

Amidst this backdrop, Kalyani Strategic Systems announced a planned multi-party agreement with U.S.-based defense firms AM General and Mandus Group LLC for developing next-gen artillery platforms. Alembic Pharmaceuticals secured U.S. FDA approval for Lamotrigine Extended-Release Tablets, and Signatureglobal launched a new mixed-use project in Gurugram. Biocon Biologics also announced its debut on senior secured notes issuance totaling $800 million.

The Securities and Exchange Board of India (SEBI) introduced several measures to revitalize the T+0 settlement cycle, expanding the list of eligible stocks and encouraging greater participation by qualified stock brokers.