Stock Market Today: Indian benchmark indices opened sharply lower on Monday, March 2, amid the Israel-Iran conflict. At around 12.06 pm, BSE Sensex reached 79,929.38, down 1,357.81 points or 1.67 per cent, while Nifty 50 at 24,767.70, down 410.95 points or 1.63 per cent.
VK Vijayakumar, Chief Investment Strategist, Geojit Investments, noted, “The uncertainty related to the war in West Asia will loom large over the market in the near-term. The major risk from the market perspective is the energy risk arising from the surge in crude. Indications are that a sharp spike in crude by, say 20 per cent, is likely only if the Hormuz Strait is closed, obstructing oil transport through the strait. There is no official confirmation of this yet. If Brent crude remains around $ 76 equity markets may remain weak but are unlikely to witness big crash.”
“Experience tells us that panic selling during a crisis is wrong strategy. Investors should refrain from selling and watch how things evolve. Data from crises during the last many decades tells us that an event like the present crisis will not have any impact on the market six months later. This is the takeaway from the market behaviour after the recent crises like the Covid crisis, Russia-Ukraine war and the Gaza conflict. The ongoing West Asian crisis is unlikely to be different. However, since a war can spring unexpected surprises, investors have to be cautious. Weakness in the market can be used to slowly accumulate high quality stocks in domestic consumption themes like banking, automobiles, capital goods and defence,” he added.
Key Triggers Behind The Fall:
Geopolitical Tensions: Air strikes by Israel and the US on Iran over the weekend killed Iran’s Supreme Leader Ayatollah Ali Khamenei, leading to retaliatory missile attacks.
Oil impact: Brent crude surged over 7 per cent to $82.40 a barrel, the highest in 14 months, after Tehran closed navigation through the Strait of Hormuz, which is a critical route for nearly 20 per cent of global oil and over 40 per cent of India’s crude imports.
Stock Fall: Stocks of oil marketing companies, aviation, paint, tyres, and chemical makers fell sharply due to rising crude costs.
Weak Rupee: The Indian rupee depreciated against the dollar.
FII Selling: FIIs net sold Rs 7,536.4 crore in Indian equities on February 27, while domestic institutional investors (DIIs) bought Rs 12,292.8 crore.
Rising Market Volatility: The India VIX surged over 15 per cent to 15.78, reflecting heightened uncertainty.
