Indian stock market trades lower amid Middle East crisis

Mumbai, June 23 (IANS) The Indian benchmark indices opened in the red on Monday amid weak global cues due to rising Middle East tensions, as selling was seen in the IT and auto sectors in the early trade.

At around 9.30 am, Sensex was trading 677.10 points or 0.82 per cent down at 81,731.07 while the Nifty declined 204.6 point or 0.81 per cent at 24,907.75

Nifty Bank was down 387.75 points or 0.69 per cent at 55,865.10 The Nifty Midcap 100 index was trading at 57,776.05 after dropping 219.45 points or 0.38 per cent. Nifty Smallcap 100 index was at 18,148.95 after declining 45.25 points or 0.25 per cent.

According to analysts, even though the US bombing of Iran’s three nuclear facilities has worsened the crisis, the impact on the market is likely to be limited. The uncertain factor now is the timing and nature of the Iranian response.

"If Iran targets and damages the US defence facilities in the region or hurts US military personnel seriously, the US response can be huge and this might further worsen the crisis. But the market assessment is that there are limits to what Iran can do against US and Israel," said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.

The fact is that the closure of Hormuz Strait will harm Iran and Iran’s friend China more than anyone else. The market construct continues to favour a ‘buy on dips’ strategy, he added.

Meanwhile, in the Sensex pack, Infosys, HCL Tech, Hindustan Unilever Limited, Eternal, TCS, Asian Paints, Power Grid, Reliance, ITC were the top losers. Whereas, Bharat Electronics Limited (BEL), Bharti Airtel and Trent were in the list of top gainers.

The foreign institutional investors (FIIs) extended their buying on the fourth consecutive day on June 20 as they bought equities worth Rs 7,940.70 crore. On the other hand, domestic institutional investors (DIIs) sold equities of Rs 3,049.88 crore on the same day.

“We expect our markets to respond unfavourably and open lower before attempting to recover from these initial losses. Immediate resistance is now placed at 25,222 levels. Support has shifted upwards to 24,800 levels,” said Devarsh Vakil, Head of Prime Research at HDFC Securities.

In the Asian markets, Bangkok, Japan, Seoul, Hong Kong and Jakarta were trading in red, while only China was trading in green.

In the last trading session on Friday, Dow Jones in the US closed at 42,206.82, up 35.16 points, or 0.08 per cent. The S&P 500 ended with a loss of 13.03 points, or 0.22 per cent, at 5,967.84 and the Nasdaq closed at 19,447.41, down 98.86 points, or 0.51 per cent.

--IANS

skt/na