Sensex Nifty Plunge 1.5% Amid Middle East Tensions

Market plunges amid Middle East tensions

By midday on October 3, the Sensex and Nifty 50 continued their decline amid widespread selling, driven by growing concerns over the escalating conflict in the Middle East. The Sensex had dropped by 1,239 points, or 1.5%, to 83,026, while the Nifty fell by 376 points to 25,420. Market breadth was negative, with 960 stocks gaining, 2,393 losing, and 79 remaining unchanged.

Broader indices reflected the downturn, as both the BSE Midcap and Smallcap indices lost over 1%. Volatility surged, with the India VIX, the market’s fear indicator, jumping nearly 11% to 13.3, indicating rising anxiety among investors.

Attention is now on U.S. jobless claims data due today, along with the non-farm payrolls report set for October 4.

All 13 sectoral indices were in negative territory, with the biggest losses seen in financial services, oil and gas, and auto sectors.

Nifty Bank marked its fourth consecutive session of losses, dropping over 1%, as major banking stocks like ICICI Bank, HDFC Bank, and Axis Bank fell between 2% and 3%. Crude-sensitive stocks such as BPCL, HPCL, Asian Paints, and Indian Oil declined by 2% to 4%, with Brent crude approaching $75 per barrel. Nifty Auto continued its slump, sliding nearly 2%, driven by declines in Tata Motors, Maruti Suzuki, and Bajaj Auto.

According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the stable performance of the U.S. market on October 2 reflects investor confidence that the Israel-Iran conflict is unlikely to affect economies or corporate earnings for now. However, this outlook could shift dramatically if Israel targets Iranian oil installations, which would likely cause a sharp rise in crude prices, particularly harmful for oil-importing countries like India.

Vijayakumar also anticipates that foreign institutional investors (FIIs) will continue selling Indian stocks due to their high valuations and instead favor the cheaper Hong Kong market.

Key Nifty gainers included JSW Steel, ONGC, Tata Steel, Dr. Reddy’s Labs, and SBI, while the top losers were BPCL, Shriram Finance, Asian Paints, Tata Motors, and Eicher Motors.

On the Sensex, JSW Steel, Tata Steel, and SBI were the leading gainers, while Asian Paints, Tata Motors, L&T, Wipro, and Axis Bank saw the biggest losses.

In stock moves, Dabur India shares dropped over 5% after its Q2 FY25 business update revealed that extreme weather events like floods and heavy rains had hurt consumer demand, prompting brokerages to lower their target prices for the FMCG company. On the other hand, Jubilant Ingrevia shares surged more than 6% following a deal signed by its subsidiary with an agrochemical company.