Stocks lost value in Monday’s trading session as geopolitical tensions escalated after Palestinian militant group Hamas launched a surprise attack on Israel, leading to a surge in crude oil prices.
The S&P BSE Sensex declined about 483 points, or 0.73%, to close at 65,512.39 while the NSE Nifty 50 closed 0.72%, or 141 points lower at 19,512.35. Intraday, the Sensex fell over 560 points or about 0.85%. Nifty 50 declined 173 points, or 0.88%, intraday. The BSE Bankex and Bank Nifty indices also declined about 1.04% and 1.07%, respectively.
The higher crude oil prices also weighed on some of its dependent sectors such as S&P BSE Services, which declined 2.73% and emerged as the top sectoral laggard, followed by S&P BSE Utilities, down at 1.93%, while S&P BSE Power was down 1.58%.
Foreign portfolio investors sold net Indian equities worth Rs 997.76 crore while domestic institutional investors bought shares worth Rs 2,661.27 crore on Monday.
While some experts deemed the impact of the Israel-Hamas Conflict on stock markets to be short-lived, others are not sure.
“These kind of geopolitical tensions always create short-term volatility in every market, including Indian markets,” according to Siddharth Sedani, EVP – equity advisor and sales at Anand Rathi.
Historically, markets have suffered due to geopolitical tensions such as the Russia-Ukraine conflict. However, from a medium- to long-term perspective, it’s all about the fundamentals, Sedani said, adding that India’s macro and fundamentals are quite strong. “I don’t think there is much to worry about, barring the short-term reaction.”
It appears that this is not a short-term occurrence, said one independent analyst on the condition of anonymity. While the overall fundamentals remain the same, the risks do not remain the same, the person said. “Weak conditions will naturally make people more risk averse, therefore drive a bit more of outflows despite fundamentals remaining unchanged.”
Meanwhile, HCL Technologies, Tata Consultancy Services and Hindustan Unilever were the top Sensex gainers, while Mahindra & Mahindra, Bajaj Finance and Tata Steel were the top laggards.
Investor wealth fell by Rs 3.68 trillion to Rs 316 trillion on Monday.