Informist, Monday, Oct 9, 2023
By Neeshita Beura
MUMBAI – After having risen for the past two sessions, benchmark equity indices ended lower today due to concerns that militant group Hamas' attack on Israel could disrupt crude oil supply chains and lead to a spike in the 10-year benchmark US Treasury yield and the dollar.
"Post the sudden outbreak of war between Israel and Palestine-based militant group Hamas over the weekend, worries about further spikes in oil prices took focus, leading the markets to tumble in negative territory in today's trading session," Avdhut Bagkar, technical and derivatives analyst at StoxBox, said in a note.
Today, both the Nifty 50 and the Sensex ended 0.7% lower at 19512.35 points and 65512.39 points, respectively.
Geopolitical tensions in Israel led to concerns regarding the supply of crude oil, resulting in a sharp rise in the prices of the commodity. Following Israel's declaration of war, US stock index futures declined and Brent crude prices on the Intercontinental Exchange rose as much as $89 per barrel today.
However, analysts are of the view that it is a bit early to gauge the exact impact of the war on the market, and are waiting to see how the war progresses to draw a conclusion about its ramifications.
"Wars do not get over in one day. It will take some time to assess the impact," said Anita Gandhi, whole-time director at Arihant Capital Markets. "The war is taking place at a time when central banks have had some success in managing inflation and this may hit those efforts. Especially for India, any rise in crude oil prices is negative because of our dependence on imported crude oil."
Meanwhile, S. Krishnakumar, director at Lion Hill Capital, pointed out that regardless of the war, given the high valuations across emerging markets, indices could cool off for some time. "With the war situation, there could possibly be a flight to the dollar for safety and emerging market currencies could take a knock," he said.
"If we sit through this period of time, we will come to normalcy and eventually the market will perform after these tensions end."
Narendra Solanki, head of fundamental research at Anand Rathi Investment Services, said there are concerns due to the Israel-Hamas conflict as it might lead to a rise in crude oil prices, which could cause a spike in costs for Indian companies. However, there may not be any more negative reaction beyond that seen in the morning, unless there are new negative developments, he said.
Raj Vyas, vice-president of research at Teji Mandi, said that there is no cause for panic for now as the situation in Israel is still evolving. "...(situation in Israel) needs to be tracked for a couple of days before we react to it," he added.
Today, shares of downstream oil companies such as Bharat Petroleum Corp, Hindustan Petroleum Corp, and Indian Oil Corp closed 2.1-2.6% lower. On the other hand, shares of upstream companies such as Oil India and Oil and Natural Gas Corp clocked gains.
Today, index heavyweights such as HDFC Bank, ICICI Bank, and Reliance Industries also helped drag the domestic benchmarks lower. While almost all sectoral indices ended in the red, information technology companies such as HCL Technologies and Tata Consultancy Services fared relatively better.
Excluding the Nifty Healthcare, all sectoral indices closed down 0.1-3.1%.
All Adani Group companies closed down 1.3-6.1%, with Adani Ports and Special Economic Zone the worst hit stock on the Nifty 50 due to concerns related to the company's Haifa port in Israel. Adani Group had bought the port earlier this year for $1.2 bln, according to a Business Today report.
In the broader market, the Nifty small- and mid-cap indices were down 1.1-1.9%.
* Of the Nifty 50 stocks, 6 rose, 43 fell, and 1 was unchanged
* Of the Sensex stocks, 3 rose, 27 fell
* On the BSE, 993 stocks rose, 2,804 fell, and 132 were unchanged
* Nifty PSU Bank: down 3.1%; Nifty Oil & Gas: down 1.1%, Nifty IT: down 0.1%
BSE NSE
Sensex: 65512.39, down 483.24 pts or 0.7% Nifty 50: 19512.35, down 141.15 pts or 0.7%
S&P BSE Sensitive Index Nifty 50
Lifetime High: 67927.23 (Sep 15, 2023) : Lifetime High: 20222.45 (Sep 15, 2023)
Record Close High: 67838.63 (Sep 15, 2023) : Record Close High: 20192.35 (Sep 15, 2023)
2023 1st day close: 61167.79 (Jan 2) : 2023 1st day close: 18197.45 (Jan 2)
2023 Closing High: 67838.63 (Sep 15, 2023) : 2023 Closing High: 20192.35 (Sep 15)
2023 Closing Low: 59288.35 (Feb 27) : 2023 Closing Low: 17311.80 (Oct 17)
2023 High (intraday): 67927.23 (Sep 15) : 2023 High (intraday): 20222.45 (Sep 15)
2023 Low (intraday): 58699.20 (Jan 30) : 2023 Low (intraday): 17098.55 (Jan 17)
2022 1st day close: 59183.22 (Jan 3) : 2022 1st day close: 17625.70 (Jan 3)
2022 Closing High: 63284.19 (Dec 1) : 2022 Closing High: 18812.50 (Dec 1)
2022 Closing Low: 51360.42 (Jun 17) : 2022 Closing Low: 15293.50 (Jun 17)
2022 High (intraday): 63583.07 (Dec 1) : 2022 High (intraday): 18887.60 (Dec 1)
2022 Low (intraday): 50921.22 (Jun 17) : 2022 Low (intraday): 15183.40 (Jun 17)
2021 Closing High: 61305.95 (Oct 14) : 2021 Closing High: 18338.55 (Oct 14)
2021 Closing Low: 46285.77 (Jan 29) : 2021 Closing Low: 13634.60 (Jan 29)
2021 High (intraday): 61353.25 (Oct 14) : 2021 High (intraday): 18350.75 (Oct 14)
2021 Low (intraday): 46160.46 (Jan 29) : 2021 Low (intraday): 13596.75 (Jan 29)-
2020 Closing High: 47751.33 (Dec 31) : 2020 Closing High: 13981.95 (Dec 30)
2020 Closing Low: 25981.24 (Mar 23) : 2020 Closing Low: 7610.25 (Mar 23)
2020 High (intraday): 47896.97 (Dec 31) : 2020 High (intraday): 14024.85 (Dec 31)
2020 Low (intraday): 25638.90 (Mar 24) : 2020 Low (intraday): 7511.10 (Mar 24)
2019 High (intraday): 41809.96 (Dec 20) : 2019 High (intraday): 12293.90 (Dec 20)
2019 Low (intraday): 35287.16 (Feb 19) : 2019 Low (intraday): 10583.65 (Jan 29)
2018 High (intraday): 38938.91(Aug 28)) : 2018 High(intraday): 11760.20 (Aug 28)
2018 Low (intraday): 32483.8 (Mar 23) : 2018 Low (intraday): 9951.9 (Mar 23)
2017 High (intraday): 34005.37 (Dec 26) : 2017 High(intraday): 10515.10 (Dec 26)
End
Edited by Avishek Dutta
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