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Sensex, Nifty trade lower after Middle East conflict lifts oil prices
Oct-04-2024

Indian equity benchmarks made negative start on Friday and soon turned volatile amid escalating geopolitical tensions in the Middle East. The fallout from Israel's airstrikes on central Beirut, which resulted in at least six fatalities, has left investors anxious as the region braces for further escalation. This action followed Israel’s deadliest day on the Lebanese front in a year of ongoing clashes with the Iran-backed group Hezbollah. Sensex and Nifty are trading lower with marginal cut in early deals amid uncertainty about surge in oil prices, as investors anticipate potential disruption in crude oil flows amid the Middle East conflict against an amply-supplied global market. Foreign fund outflows also dented domestic sentiments. On October 3, Foreign Institutional Investors (FIIs) sold shares worth Rs 15,243.27 crore. However, traders took note of report that Minister of Commerce and Industry Piyush Goyal and US Commerce Secretary Gina Raimondo held the 6th Commercial Dialogue and reviewed the progress made in semiconductors supply chains, innovation handshake, energy-industry network and the Indo-Pacific Economic Framework for Prosperity. 

On the global front, Asian markets are trading mostly in green with cautiousness, following the broadly negative cues from global markets overnight, as traders remain careful and keep an eye on developments in the Middle East, where an escalating conflict has contributed to a sharp increase in the price of crude oil. They also seemed reluctant to make significant moves ahead of the highly anticipated US monthly jobs report later in the day. The data could impact the outlook for the U.S. economy as well as expectations regarding how aggressively the Federal Reserve will lower interest rates.

Back home, logistic stocks are in focus with a private report that the Indian logistics market, valued at Rs 9 trillion in FY23, is projected to grow significantly, reaching Rs 13.4 trillion by FY28, registering a compounded annual growth rate (CAGR) of 8-9 per cent. In stock specific development, Bank of Baroda traded higher as it plans to sell its Oman operations to Bank Dhofar as part of a foreign operation rationalisation strategy. The total business of BoB in Oman stands at 113.35 million Omani Rial.

The BSE Sensex is currently trading at 82327.13, down by 169.97 points or 0.21% after trading in a range of 82051.86 and 82649.16. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.94%, while Small cap index was down by 0.91%.

The few gaining sectoral indices on the BSE were IT up by 0.20%, Bankex up by 0.05% and TECK up by 0.04%, while Realty down by 2.81%, Power down by 1.37%, Utilities down by 1.37%, Oil & Gas down by 1.14% and PSU down by 1.05% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Co up by 0.96%, Axis Bank up by 0.81%, Indusind Bank up by 0.73%, Tata Motors up by 0.58% and Tech Mahindra up by 0.46%. On the flip side, Bajaj Finance down by 2.11%, NTPC down by 1.73%, Asian Paints down by 1.28%, Bajaj Finserv down by 1.20% and Ultratech Cement down by 1.11% were the top losers.

Meanwhile, India and the US discussed business opportunities to increase American investments in the planned industrial cities in the country to boost two-way economic ties. Commerce and Industry Minister Piyush Goyal and US Secretary of Commerce Gina Raimondo held discussions in Washington DC. Goyal co-chaired the sixth India-US CEO Forum with Raimondo. He said ‘We discussed opportunities for US investments in upcoming 20 industrial cities in India to foster mutual growth’. 

The Union Cabinet has approved 12 new industrial cities in 10 states to boost domestic manufacturing with an estimated investment of Rs 28,602 crore. Spanning across 10 states and strategically planned along six major corridors, these projects represent a significant leap forward in India's quest to enhance its manufacturing capabilities and economic growth. These industrial areas will be located in Khurpia in Uttrakhand, Rajpura-Patiala in Punjab, Dighi in Maharashtra, Palakkad in Kerala, Agra and Prayagraj in UP, Gaya in Bihar, Zaheerabad in Telangana, Orvakal and Kopparthy in AP, and Jodhpur-Pali in Rajasthan.

The India-US CEO Forum platform allow private sector members to develop and provide recommendations to the Indian and US governments that reflect the private sector's views, concerns and suggestions about the creation of an environment in which the bilateral economic links are strengthened. The forum is co-chaired from Private Sector by N. Chandrasekaran, Chairman, Tata Sons, and James Taiclet, President and Chief Executive Officer, Lockheed Martin. 

This is the third time the Forum has been convened since its reconstitution in November 2022 by the Governments of India and the USA and saw participation from 16 CEOs. The CEOs, under the seven working groups, presented priority areas to create stronger partnerships and boost growth across various critical areas such as Entrepreneurship and Promoting Small Businesses, Healthcare and Pharmaceuticals, Aerospace and Defence, ICT and Digital Infrastructure, Energy, Water and Environment, Infrastructure and Manufacturing, Financial Services, Trade and Investments, among others.

The CNX Nifty is currently trading at 25189.55, down by 60.55 points or 0.24% after trading in a range of 25094.55 and 25287.90. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were ONGC up by 1.32%, SBI Life Insurance up by 1.31%, Titan Company up by 0.84%, Wipro up by 0.82% and Tata Motors up by 0.73%. On the flip side, BPCL down by 3.18%, Bajaj Finance down by 1.97%, Trent down by 1.82%, NTPC down by 1.58% and Hero MotoCorp down by 1.39% were the top losers.

Asian markets are trading mostly higher; Hang Seng surged 347.22 points or 1.55% to 22,460.73, Nikkei 225 rose 102.23 points or 0.26% to 38,654.29, KOSPI increased 10.27 points or 0.4% to 2,571.96 and Straits Times advanced 5.72 points or 0.16% to 3,583.15. On the other hand, Taiwan Weighted lost 82.47 points or 0.37% to 22,307.92 and Jakarta Composite was down by 45.08 points or 0.6% to 7,498.75.
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