Sensex, Nifty down 1% on Iran-Israel tensions; consolidation to continue

Amid escalating tensions in West Asia, leading to concerns over Iran-Israel conflict, Indian stock market witnessed significant downturn on 16th April morning. Both Sensex and Nifty plummeted by around 1 percent, reflecting investor apprehension in face of geopolitical uncertainty. Broader market indices, such as Nifty Midcap 100 and Nifty Smallcap 100, also experienced substantial declines of up to 3 percent. Analysts anticipate period of consolidation following recent upward trend, especially with onset of earnings season and commencement of Lok Sabha elections in India. Devarsh Vakil, Deputy Head of Retail Research at HDFC Securities, highlighted various factors influencing market sentiment:

1. Including Israel-Iran conflict
2. Global economic indicators
3. Crude oil prices
4. Q4FY24 financial results
5. Forthcoming general elections of 2024

Experts projected Nifty to find support levels around 22,303-22,142, stressing on resilience of intermediate upside trend. Conversely, Anand James, who is Chief Market Strategist at Geojit Financial Services, cautioned against potential bearish trend if Nifty fails to maintain levels above 22,200.

Surge in India VIX, reflecting increased near-term volatility, further underscored market uncertainty. Across sectors, not only Bank Nifty, Nifty FMCG, but also Nifty Realty witnessed significant declines, mirroring overall market sentiment. Whereas, attention was focused on Tata Consultancy Services (TCS) following its way better-than-expected Q4 of FY24 earnings report. Meanwhile brokerages expressed optimism regarding TCS's long-term prospects, concerns lingered over near-term demand outlook.

Internationally, Asia-Pacific markets were also on downward trajectory, with Japan's Nikkei 225, Australia's S&P 200 index, and South Korea's Kospi all registering losses amidst apprehensions over fallout from Iran's attack on Israel. Oil prices remained relatively stable, with Brent Crude hovering above $90 per barrel and WTI Crude above $85 per barrel.

To Summarize

Overall, geopolitical tensions and macroeconomic uncertainties continue to shape market dynamics, prompting investors to tread cautiously in face of mounting risks!!!