Dalal Street opens steady as investors track US-Iran conflict
The S&P BSE Sensex was up 47.74 points, or 0.06%, at 76,536.70 in early trade, while the NSE Nifty50 gained 31.90 points, or 0.13%, to trade at 24,063.15.
Benchmark stock market indices opened on a cautious note on Tuesday as investors turned wary after fresh US military action in southern Iran raised concerns that tensions in West Asia may continue despite ongoing peace talks.
The S&P BSE Sensex was up 47.74 points, or 0.06%, at 76,536.70 in early trade, while the NSE Nifty50 gained 31.90 points, or 0.13%, to trade at 24,063.15. The benchmarks had rallied sharply in the previous session on hopes of a possible US-Iran peace deal.
Investor sentiment remained mixed after the US carried out strikes on southern Iran targeting boats allegedly attempting to lay mines and missile-launch sites. Washington described the strikes as “defensive”, even as negotiations with Tehran continue to end the three-month-long conflict.
Crude oil prices remained volatile amid the geopolitical uncertainty. Brent crude traded near $98 per barrel, while WTI crude slipped more than 5% to around $91.6 per barrel.
Broader markets continued to outperform benchmark indices, with the Nifty Smallcap 100 rising 0.84% and the Nifty Midcap 100 gaining 0.21%. India VIX, the volatility index, declined 4.83%, indicating easing market volatility.
Among sectoral indices, Nifty Media emerged as the top gainer, rising 0.89%, followed by Nifty Metal, which gained 0.64%. Nifty PSU Bank climbed 0.55%, while Nifty IT rose 0.42%. Nifty Private Bank and Nifty Financial Services also traded in the green. However, Nifty Healthcare Index slipped 0.24%, while Nifty Consumer Durables declined 0.34%.
Among Sensex stocks, Eternal Ltd led the gainers, rising 2%. Infosys gained 0.86%, while State Bank of India climbed 0.73%. ICICI Bank advanced 0.61%, and Maruti Suzuki India rose 0.59% in early trade.
On the losing side, Sun Pharmaceutical Industries fell 0.59%, Bharti Airtel slipped 0.57%, Titan Company declined 0.53%, ITC dropped 0.48%, and Trent fell 0.48%.
Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, “Even though negotiations are continuing for an end to the West Asia crisis there are no indications of an imminent end to the conflict. The ‘self defence strikes’ by the US in Southern Iran has come as a dampener to the ongoing negotiations. But this is not viewed by the markets as the beginning of another round of military strikes. That’s why Brent crude remains around $98 having fallen more than 20% from the peak.”
He added, “An interesting and important trend is the risk appetite in the market. Every time a positive development emerges, indicating an end to the conflict and followed by dip in crude prices, the market has been rallying. This was evident in the 1073 point rally in the Sensex yesterday. This risk appetite is a reflection of the resilience of the economy and optimism of investors.”
“A resolution to the conflict and significant dip in crude prices has the potential to largely address the macro headwinds which the economy is facing now. This appears to be the message from the market,” Vijayakumar said.
Benchmark stock market indices opened on a cautious note on Tuesday as investors turned wary after fresh US military action in southern Iran raised concerns that tensions in West Asia may continue despite ongoing peace talks.
The S&P BSE Sensex was up 47.74 points, or 0.06%, at 76,536.70 in early trade, while the NSE Nifty50 gained 31.90 points, or 0.13%, to trade at 24,063.15. The benchmarks had rallied sharply in the previous session on hopes of a possible US-Iran peace deal.
Investor sentiment remained mixed after the US carried out strikes on southern Iran targeting boats allegedly attempting to lay mines and missile-launch sites. Washington described the strikes as “defensive”, even as negotiations with Tehran continue to end the three-month-long conflict.
Crude oil prices remained volatile amid the geopolitical uncertainty. Brent crude traded near $98 per barrel, while WTI crude slipped more than 5% to around $91.6 per barrel.
Broader markets continued to outperform benchmark indices, with the Nifty Smallcap 100 rising 0.84% and the Nifty Midcap 100 gaining 0.21%. India VIX, the volatility index, declined 4.83%, indicating easing market volatility.
Among sectoral indices, Nifty Media emerged as the top gainer, rising 0.89%, followed by Nifty Metal, which gained 0.64%. Nifty PSU Bank climbed 0.55%, while Nifty IT rose 0.42%. Nifty Private Bank and Nifty Financial Services also traded in the green. However, Nifty Healthcare Index slipped 0.24%, while Nifty Consumer Durables declined 0.34%.
Among Sensex stocks, Eternal Ltd led the gainers, rising 2%. Infosys gained 0.86%, while State Bank of India climbed 0.73%. ICICI Bank advanced 0.61%, and Maruti Suzuki India rose 0.59% in early trade.
On the losing side, Sun Pharmaceutical Industries fell 0.59%, Bharti Airtel slipped 0.57%, Titan Company declined 0.53%, ITC dropped 0.48%, and Trent fell 0.48%.
Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, “Even though negotiations are continuing for an end to the West Asia crisis there are no indications of an imminent end to the conflict. The ‘self defence strikes’ by the US in Southern Iran has come as a dampener to the ongoing negotiations. But this is not viewed by the markets as the beginning of another round of military strikes. That’s why Brent crude remains around $98 having fallen more than 20% from the peak.”
He added, “An interesting and important trend is the risk appetite in the market. Every time a positive development emerges, indicating an end to the conflict and followed by dip in crude prices, the market has been rallying. This was evident in the 1073 point rally in the Sensex yesterday. This risk appetite is a reflection of the resilience of the economy and optimism of investors.”
“A resolution to the conflict and significant dip in crude prices has the potential to largely address the macro headwinds which the economy is facing now. This appears to be the message from the market,” Vijayakumar said.
