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Sensex, Nifty trade under pressure in early deals amid geopolitical tensions
Apr-19-2024

Indian equity benchmarks made gap-down opening on Friday tracking sell-off in Asian counterparts as tensions flared up in the Middle East with Israel likely striking Iran at three locations. Iran says the explosion heard in Isfahan was a result of the activation of Iran's air defence system. Also, oil prices jumped more than 3 percent on signs of escalating tensions in the Middle East, weighted down on the domestic sentiments. Sensex and Nifty are trading deeply in red in early deals with cut of over half a percent each. All the sectoral indices are trading under pressure led by IT, Realty and TECK. Foreign fund outflows also dented sentiments. Foreign institutional investors (FIIs) net sold shares worth Rs 4,260.33 crore on April 18, provisional data from the NSE showed. Traders took note of report that Union Finance Minister Nirmala Sitharaman said all necessary steps required to mitigate the fallout of the Israel-Iran conflict on India will be taken. 

On the global front, all the Asian markets are trading lower, following the mixed cues from Wall Street overnight, on ongoing concerns over the tensions in the middle-east with reports of Israel retaliating to last weekend's attacks. Interest rates continued to weigh on markets as the US Fed is now widely expected to hold off on cutting rates until at least July. Back home, the National Stock Exchange (NSE) announced that it will launch derivatives contracts for the Nifty Next 50 index from April 24 following approval from the Sebi, amid rising competitive pressure from rival BSE. In stock specific development, Infosys declined after it announced a muted constant currency (CC) revenue growth forecast of 1-3 percent for FY25.

The BSE Sensex is currently trading at 72079.20, down by 409.79 points or 0.57% after trading in a range of 71816.46 and 72097.96. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.98%, while Small cap index was down by 0.80%.

The top losing sectoral indices on the BSE were IT down by 1.56%, Realty down by 1.35%, TECK down by 1.14%, Auto down by 1.05%, Consumer Discretionary down by 0.93%, while there was no gainer on the BSE sectoral front.

The top gainers on the Sensex were ITC up by 0.91%, Bharti Airtel up by 0.69%, HDFC Bank up by 0.45%, Hindustan Unilever up by 0.23% and ICICI Bank up by 0.11%. On the flip side, Infosys down by 2.17%, HCL Technologies down by 1.97%, Axis Bank down by 1.87%, Tata Motors down by 1.55% and Larsen & Toubro down by 1.50% were the top losers.

Meanwhile, talking about the India-UK free trade agreement (FTA) negotiations, the UK government said there has been good market access offered on both sides but not enough to secure a FTA. Indian negotiators are in London this week to continue discussions with their British counterparts. The recent restructuring of the BBC to create a new Indian-owned entity in order to comply with the country's foreign direct investment (FDI) rules was flagged by Liberal Democrat peer Lord Jeremy Purvis, who questioned the level of market access being offered to India in the field of media, data and telecoms as part of the FTA negotiations.

UK Foreign Secretary David Cameron said ‘My understanding of where we are with the trade deal is that good market access has been offered on both sides, but not quite enough yet to secure a deal. It is important with such trade deals, as you only really get one proper shot at it, to make sure that it is a good enough deal that will be welcomed by industry leaders here in the UK as offering real market access’. It came as a team from India arrived in London to continue talks this week under the fourteenth round of FTA negotiations, which are aimed at significantly enhancing the GBP 38.1 billion bilateral partnership across different sectors.

Specifically referencing the point on media access, Lord Cameron said he would have to look into the details but his personal view was that 'we should open up media access on both sides to make sure we have a good plurality of media'. Earlier this month, the BBC confirmed the launch of Collective Newsroom as an independent entity which will create programmes and content for the BBC as its first client. Lord Purvis questioned this necessity for Britain's public broadcaster to operate in India unlike in any other country, alluding to 'harassment and intimidation' by authorities. He said ‘My understanding is that India passed a law insisting that digital media companies had to be Indian-owned, and the BBC has had to restructure on that basis’, and noted that this was 'not the British way'. He said ‘Nonetheless, that is the reason why the BBC has restructured, together with some disagreements with India’.

The CNX Nifty is currently trading at 21873.20, down by 122.65 points or 0.56% after trading in a range of 21777.65 and 21882.65. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were ONGC up by 1.82%, Apollo Hospital up by 1.29%, ITC up by 0.94%, Bharti Airtel up by 0.75% and HDFC Bank up by 0.39%. On the flip side, BPCL down by 3.32%, Bajaj Auto down by 2.14%, Infosys down by 2.12%, Axis Bank down by 1.88% and HCL Technologies down by 1.88% were the top losers.

All Asian markets are trading lower; Nikkei 225 slipped 939.88 points or 2.47% to 37,139.82, Taiwan Weighted lost 691.15 points or 3.4% to 19,610.05, Hang Seng declined 201.85 points or 1.23% to 16,184.02, Jakarta Composite weakened 122.65 points or 1.71% to 7,044.16, KOSPI dropped 45.22 points or 1.72% to 2,589.48, Straits Times fell 18.75 points or 0.59% to 3,168.91 and Shanghai Composite was down by 12.22 points or 0.4% to 3,062.00.
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