Stock Markets See Widespread Decline Amid Geopolitical and Economic Concerns

On Thursday, both domestic and international factors contributed to significant declines in India’s benchmark indices. The Nifty index closed at 25,250, marking a decrease of 2.12% or 546 points, making it the most severe single-day drop since August 5, 2024. The S&P BSE Sensex also experienced a decline, ending at 82,497.10, down 1,769.19 points or 2.10%.

Among the hardest-hit sectors were Nifty Realty, Auto, Financial Services, and Oil & Gas. The Bank Nifty index also fell by more than 2%, closing at 51,845.20. Concerns over the ongoing Iran-Israel conflict, foreign institutional investment flows to China, and new regulations by the Securities and Exchange Board of India (SEBI) for the Futures and Options (F&O) segment are collectively believed to have influenced this market downturn.

Ajit Mishra, the Senior Vice President of Research at Religare Broking, highlighted that the Nifty has dropped past several support levels, including the 20-day exponential moving average at around 25,580 and a trendline support near 25,350. Mishra noted that the market might face further downside, identifying the 25,000-25,150 zone as the next support, while a potential rebound would likely be limited to the 25,450-25,600 range.

Jatin Gedia, a Technical Research Analyst at Sharekhan, emphasized the correction in Bank Nifty, which had previously led a market uptrend in late September. Gedia forecasts further declines towards the 49,700 level, previously recorded as an August low, underscoring crucial resistance in the 52,600-52,700 range.

In the broader Asian markets, Chinese stock indices showed strong gains, and Japan’s Nikkei experienced a rebound. However, elsewhere in Asia, markets exhibited a mixed performance, and even Hong Kong’s exchange encountered some corrections. European markets also remained under pressure amidst these developments.

Vikram Kasat, Head of Advisory at Prabhudas Lilladher, advised investors to remain cautious, pointing to upcoming second-quarter earnings reports and the Reserve Bank of India’s (RBI) policy decisions as critical considerations. He stressed the importance of monitoring global developments and crude oil price trends due to their significant impact on market dynamics.

On a different note, Sumeet Bagadia, Executive Director at Choice Broking, and Ganesh Dongre, Senior Manager of Technical Research at Anand Rathi, have provided stock recommendations. These include Pitti Engineering Ltd, Sarda Energy & Minerals Ltd, InterGlobe Aviation Ltd (Indigo), Maharashtra Seamless Ltd, and Tata Communications Ltd, with specific buy, stop-loss, and target price strategies.