Markets tumble as Middle East tensions weigh on sentiment; Nifty closes 240 pts down
Mumbai, June 8
Indian equity markets ended sharply lower on Monday as fresh tensions in the Middle East dampened investor sentiment and triggered broad-based selling across sectors. Weak global cues and a sell-off in technology stocks further added to market pressure.
The NSE Nifty 50 index closed at 23,123, down 243.70 points or 1.04 per cent, while the BSE Sensex settled at 73,524.26, losing 719.08 points or 0.97 per cent.
Market experts said rising geopolitical tensions in the Middle East and concerns over the sustainability of the global artificial intelligence-led rally weighed on investor confidence.
Vinod Nair, Head of Research at Geojit Investments Limited, said global sentiment has weakened amid the flare-up of tensions in the Middle East.
"Domestic equities outperformed global peers despite ongoing consolidation, reflecting underlying structural resilience. Global sentiment has weakened amid a flare-up of tensions in the Middle East," he said.
Nair noted that global technology stocks have also witnessed selling pressure as investors begin to question the sustainability of the AI-driven rally.
"Selling pressure was also seen in semiconductor-heavy indices, showing early signs of valuation fatigue and positioning unwind, although it is premature to classify this as a trend reversal," he added.
According to Nair, strong labour market data from the United States and sticky inflation have increased the possibility of further monetary tightening, leading to higher bond yields and a stronger US dollar.
Sector-wise, almost all major indices on the NSE closed in the red. Nifty Metal was among the worst performers, falling 2.33 per cent. Nifty Auto declined 1.85 per cent, while Nifty Consumer Durables dropped 1.49 per cent. Nifty IT lost 1.23 per cent, and Nifty FMCG closed 0.42 per cent lower.
Meanwhile, Brent crude oil prices surged more than 4 per cent to USD 96.88 per barrel at the time of filing this report, reflecting concerns over global energy supplies amid the ongoing geopolitical tensions.
In the currency market, the Indian rupee weakened by 76 paise to trade at 95.70 against the US dollar.
Precious metals also witnessed declines. Gold prices in India fell 1.43 per cent to Rs 1,53,376 per 10 grams for 24-carat gold, while silver prices declined 2.54 per cent to Rs 2,42,235 per kg.
Other Asian markets also witnessed heavy selling pressure. Japan's Nikkei index declined more than 4 per cent to close at 63,780, while Singapore's Straits Times fell 1.74 per cent to 4,963. Hong Kong's Hang Seng index lost 1.38 per cent to close at 24,622, while Taiwan's Weighted Index dropped 3.60 per cent to 43,502. South Korea's KOSPI index witnessed the sharpest decline among major Asian markets, tumbling more than 9 per cent to close at 7,484.
— ANI
Reader Comments
Every time there is tension in Middle East, we get panic selling. But long-term investors should not worry - Indian economy is fundamentally strong with domestic demand. I am holding my mutual funds and not selling in panic. 🐂
The real worry is not just the market decline - it's the rupee falling 76 paise against dollar. Importers will feel the pinch, and if you are planning a foreign trip, better book now. Also gold down only 1.43% is surprising given the global risk-off mood. Usually gold goes up during crises.
Rs 23,123 on Nifty - still not bad for those who bought in March 2020 lows. But I feel we are in for more correction. The AI hype is deflating globally, and valuation fatigue is real. Retail investors should be careful with margin trading and futures. 📉
Good analysis by Vinod Nair from Geojit. The point about US strong labour data and sticky inflation is important - if US Fed keeps rates high, capital will flow out of emerging markets like India. Our RBI should be proactive and not just reactive. Also, metal stocks falling 2.33% is a concern for infrastructure sector.
I am a fresh investor - just started SIPs in February. Seeing red today is scary but my father says this is normal in stock markets. Should I pause my SIP or continue? The article says 'underlying structural resilience' which sounds promising, but I am nervous 😅
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.