Sensex, Nifty end lower amid rising West Asia tensions; IT stocks drag indices down
Mumbai, June 11
Indian equity benchmark indices ended a volatile trading session lower on Thursday as investor sentiment weakened amid escalating geopolitical tensions in West Asia following fresh military action by the United States against Iran.
The Nifty closed 53.35 points, or 0.23 per cent, lower at 23,161.60, while the Sensex declined 150.63 points, or 0.20 per cent, to settle at 73,832.55.
Commenting on Nifty technical outlook, experts said that the 23,300-23,400 zone now acts as an important immediate resistance area.
"A sustained move above this range would be required to improve sentiment and support a recovery toward the 23,550 region," an analyst stated.
"On the downside, the index is currently hovering near the crucial 23,100 support zone. Holding above this level will be important to prevent further weakness," a market expert mentioned.
Market participants remained cautious after reports emerged that the United States had intensified its military offensive against Iran.
US President Donald Trump said Tehran had ample time to negotiate a deal with Washington but failed to do so.
He warned that Iran would now have to face the consequences, adding that the US would strike the country "very hard".
Further adding to concerns, Iran announced the closure of the strategically important Strait of Hormuz following the US military strikes.
The development raised fears of potential disruptions to global oil supplies and heightened uncertainty across financial markets.
Among the Nifty constituents, Infosys and Eternal emerged as the top laggards, weighing on the benchmark index. The weakness in technology stocks also dragged the broader IT sector lower.
Broader markets witnessed sharper selling pressure, with the Nifty MidCap index ending 0.81 per cent lower and the Nifty SmallCap index declining 0.67 per cent.
On the sectoral front, the Nifty IT, Nifty Consumer Durable and Nifty Chemical indices recorded the steepest losses.
In contrast, the Nifty Media, Nifty Private Bank and Nifty Pharma indices outperformed the broader market and managed to limit the overall decline.
Analysts said investors are closely monitoring developments in West Asia, as any further escalation could impact global crude oil prices and risk sentiment across equity markets.
After two days of gains, the Indian Rupee depreciated due to fresh dollar demand driven by forward maturities and a recovery in the dollar index amid safe-haven flows.
"Technically, a decisive breach above 95.80 could trigger sharp short-covering and aggressive hedging, paving the way toward 96.50. On the downside, 94.70 continues to act as a strong base," a market expert mentioned.
— IANS
Reader Comments
Market volatility is expected with global tensions. But India's economic fundamentals are strong - our domestic consumption story remains intact. The IT sector dragging is concerning though, since tech stocks are a major employment driver. Hope the situation stabilizes soon. 🤞
I invested in IT stocks last month thinking they were safe. Now this happens! 😤 But seriously, the government needs to have better contingency plans for such geopolitical risks. We can't keep playing this game every time there's tension in the Middle East. The Strait of Hormuz closure will hurt our fuel prices badly.
The rupee weakening is a double whammy for common people - imported goods like medicines and electronics will become costlier. Meanwhile our exports might benefit, but that small gain isn't worth the broader economic pain. Need quick diplomatic resolution to avoid further escalation.
Good that some sectors like Pharma and Media are holding up. But my concern is that this volatility will hurt retail investors who just entered the market. SEBI should issue some advisory and mutual funds should reassure their investors. Long-term perspective is key, but short-term nerves are frayed. 😅
Analyst here - the 23,100 support level mentioned is critical. If Nifty breaks that, we could see a sharper correction towards 22,800. However, India's domestic liquidity is strong with retail SIPs continuing. Patience needed. Also watching crude - if it stays above $95 for long, expect rate hike fears to return.
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