
Markets Slide: Sensex Drops 570 Points, Nifty Slips Below 24,750 Amid Middle East Tensions
The India VIX, a measure of market concern, increased 7.56 percent to 15.08, indicating increased market volatility.
The benchmark Nifty and Sensex indices saw losses for a second day in a row as investor morale was shaken by escalating Middle East tensions and persistent trade worries. With the India VIX rising more than 7% and all of the key sectoral indexes falling into the red, a widespread sell-off engulfed the market, indicating growing anxiety.
The Nifty was down 169.60 points, or 0.68 percent, at 24,718.60 at the closing, while the Sensex was down 573.38 points, or 0.70 percent, at 81,118.60. Approximately 124 shares were steady, 2326 shares fell, and 1520 shares increased.
“If the war with Iran continues, the Israeli strike might have serious economic effects. Brent crude has already jumped over 12 percent to $78 a barrel after Israel said the operation might last for several days. If Iran retaliates by blocking the Strait of Hormuz, a vital oil supply route, prices may rise even more. The length of the war will have a significant impact on how the market responds, but in the short term, a risk-off attitude is probably going to prevail, according to V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.
The NSE’s sectoral indices saw significant losses, with the Nifty PSU Bank index suffering the worst losses at 1.51%, followed by Nifty Metal and Nifty Bank, which fell 1.23 and 1.17 percent, respectively. Cuts of more than 1 percent were also seen in the FMCG, Infrastructure, Energy, and Private Bank indices. The Nifty Midcap 100 and Smallcap 100 saw declines of 0.4 and 0.5 percent, respectively, among the larger markets. After opening higher, the Nifty IT index concluded the day flat. India VIX, on the other hand, increased 7.56 percent to 15.08, a sign of increasing market volatility.
As mounting tensions in the Middle East generated fears of global trade disruptions and soaring tanker prices, demand for Indian shipping equities surged on June 13, outperforming a poor overall market. Top gainers on the Nifty 500 index were GE Shipping and Shipping Corporation of India, whose shares jumped up to 10%. As ships are expected to reroute to avoid the increasingly unpredictable Strait of Hormuz, a vital conduit for the global transportation of gas and oil, investor enthusiasm for shipping stocks remained robust despite projections of increased freight and tanker costs.
As the conflict between Israel and Iran intensified, defence stocks sharply increased on June 13, raising expectations of more orders for defensive equipment in the face of increased international unpredictability. A two-day losing skid was ended by the Nifty India Defence index rising 2.5 percent as a result of the steep increase in share prices.
On a longer time period, the higher highs and higher lows are still present, but the bearish engulfing pattern promotes short-term caution. A decrease in momentum is shown by the RSI’s drop from 60 to 55. Intraday volatility has increased due to a modest increase in the Average True Range (ATR). The immediate support is still at 24,800; a breach below this level would signal a more severe decline, while 25,100 is still a strong upper limit.
Mild profit booking caused the Nifty Bank index to retreat in the direction of the 20-Day SMA, which is currently serving as immediate support. However, because the price stays well above the medium-term moving averages, the major trend is still in place. The index is presently trading close to the 56,000–56,200 range that was the previous breakout zone. A prolonged break below this area would allow for more declines in the direction of the next support level, which is 55,300. 56,700 still presents immediate resistance on the upswing. A break below 55,300 might weaken the trend and change the short-term picture to negative, thus prudence is currently advised, according to Om Mehra, Technical Research Analyst at SAMCO Securities.
Bharat Electronics, ONGC, Tech Mahindra, TCS, and Wipro were among the top Nifty gainers. Among the leading laggards on the losing side were Adani Ports, Hindalco, IndusInd Bank, SBI, and ITC.