Indian stocks continued to fall amid rising tensions in the Middle East. In morning trade, the Nifty fell 1.55 per cent or 399.3 points below the 25,400 level to 25,397.6, while the Sensex plunged 1,289.05 points or 1.53 per cent to 82,977.24.
“Markets are likely to remain volatile as the situation develops, and it is still unclear how global dynamics will change in the coming days,” said Tradejini COO TRIVESH D. Ta.
Santosh Meena, head of research at Swastika Investmart on market technicals, said, “The Nifty is currently trading around the 20-day moving average (DMA) of 25,500 yen, but there is a possibility of a rebound from this level. “However, there is selling pressure.” Higher levels remain risky and recent highs of 26,277 are likely to act as short-term resistance, traders are advised to adopt a ‘sell on the rise’ strategy until the Nifty is unable to sustain the downside. Recommended. , the major support levels to watch are 25,100 and 24,800. ”
For long-term investors, this correction presents a good buying opportunity in large-cap stocks with more attractive valuations. He added that he is observing sector rotation and expects commodity-related stocks to perform well in the short term.
Possible reasons for today’s market plunge include:
Rising tensions in the Middle East:
Iran’s attack on Israel has caused geopolitical tensions and global security threats. Lebanese Health Ministry said in a statement that two people were killed and 11 injured in an attack by Israeli forces on the Bachora neighborhood in central Beirut early Thursday.
Increase in oil prices:
Oil prices surged higher in Thursday trading amid heightened geopolitical tensions. Disruptions to oil flows are also expected in the wake of the ongoing crisis. At 0006 GMT, Brent crude futures rose 64 cents, or 0.87%, to $74.54 a barrel. U.S. West Texas Intermediate crude oil futures rose 72 cents, or 1.03%, to $70.82 a barrel.
Rising oil prices bode poorly for India, leading to an increase in the company’s current account deficit.
“However, the situation could change if Israel attacks Iranian oil facilities and causes a significant spike in oil prices. If that happens, it could be even more damaging for oil importing countries like India. Therefore, investors should keep an eye on the emerging situation.”VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said
Rising prices would also affect inflation, making it difficult for the world’s central banks to cut interest rates aggressively.
World market:
The current geopolitical crisis is weighing on the world, with the Hang Seng stock falling 3% after a sustained rise following China’s massive economic stimulus package. Nevertheless, Japan’s Nikkei Stock Average rose about 2%.
technical:
Anand James, chief market strategist at Geojit Financial Services, said on the Nifty outlook while playing for a pullback move on Monday, we had limited our expectations to 25945. . Incidentally, Nifty crossing 25900 was enough to attract the bears.
However, we are not yet convinced that the pullback trade is over and would like to extend our upside expectations to 26150. Alternatively, failure to close the day above 25970 could suggest a sharp decline in the 25600-24600 range that we wrote about earlier in the market. The week will see a higher launch base, he added.
