Sensex Plummets 929 Points Amid Middle East Tensions and Global Market Weakness

GG News Bureau
Mumbai, 15th April. Equity markets in India witnessed a sharp downturn in early trade on Monday, as the ongoing conflict in the Middle East and subdued sentiment in global markets weighed heavily on investor confidence. The benchmark Sensex plunged 929.74 points, extending its previous day’s decline, while the Nifty also experienced a significant drop of 216.9 points.

Key factors contributing to the market turmoil included foreign fund outflows, exacerbated by hotter-than-expected US inflation data, which further dampened investor sentiment.

In the Sensex basket, major laggards included Tata Motors, State Bank of India, Tata Steel, Power Grid, NTPC, Bajaj Finserv, Bajaj Finance, and Asian Paints.

However, amidst the downturn, Tata Consultancy Services managed to climb nearly 1 per cent after reporting a 9 per cent growth in net profit for the January-March quarter of FY24, driven by robust domestic business performance.

Nestle and HCL Technologies were among the few gainers in an otherwise bearish market environment.

Meanwhile, Asian markets mirrored the negative sentiment, with Seoul, Tokyo, and Hong Kong trading lower, while Shanghai remained in positive territory. Similarly, Wall Street ended significantly lower on Friday.

The global oil benchmark Brent crude dipped slightly to USD 90.30 a barrel amidst the market turmoil.

Furthermore, foreign institutional investors offloaded equities worth ₹8,027 crore on Friday, according to exchange data, adding to the downward pressure on Indian markets.

Commenting on the market conditions, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that several headwinds, including the Middle East conflict, proposed changes in the India-Mauritius tax treaty, and higher-than-expected US inflation, were negatively impacting investor sentiment. However, he highlighted that some of these concerns were already factored into the market prices.

In other economic developments, the amended India-Mauritius protocol on double taxation avoidance agreement (DTAA) is yet to be ratified and notified by the Income Tax Department, following the signing of the amendment on March 7, 2024.

Despite the challenging market conditions, official data released on Friday indicated a decline in retail inflation to a five-month low of 4.85 per cent in March, primarily due to easing food prices, while India’s industrial production growth accelerated to a four-month high of 5.7 per cent in February 2024, driven by the mining sector’s strong performance.