MUMBAI: The Israel-Hamas conflict in West Asia impacted sentiment on Dalal Street on Monday with the sensex ending 483 points lower at 65,512, near the benchmark’s five-week closing low mark. Financials and RIL led the slide while IT, FMCG and pharma partially cushioned the fall.
Most global markets remained steady but with a negative bias as investors preferred a wait-and-watch policy. Markets, from Nikkei in Japan to FTSE in the UK to the Dow Jones in the US, either ended marginally lower or were trading near the previous closing marks.
The escalation of the conflict in West Asia has rekindled pessimism in global markets, said Geojit Financial Services’s Vinod Nair. In addition, “the rapid surge in oil prices presents a significant threat to the global market, which is already dealing with elevated inflation and interest rates”. Although analysts are positive about quarterly earnings numbers by leading companies, “geopolitical tensions could potentially disrupt this optimistic outlook”, Nair said.
The impact of the conflict on crude oil prices is expected to be temporary since “neither Israel nor Palestine is a major oil supplier and, so far, the conflict has not directly threatened any major oil production or supply facilities,” Rahul Kalantri of Mehta Equities said in a note. However, market players fear that if the hostilities continue and major oil producing nations in the region take sides, that, along with the recent production cut moves announced by OPEC+ block, could push up crude oil prices. The day’s selling in the stock market left investors poorer by nearly Rs 4 lakh crore with BSE’s market capitalisation now at Rs 319.4 lakh crore.
In the near term, expect the markets to remain volatile amid geopolitical stress and inflationary pressure ahead of inflation data from the US, Europe and China later during the week, said Siddhartha Khemka, head, retail research, Motilal Oswal Financial Services.
In the forex market, the rupee closed nearly unchanged at 83.27 to the dollar, compared to 83.25 on Friday. However, forex traders were cautious about the geopolitical tensions and the hardening of US treasury bill yields. In the domestic government bond market, however, bearish trend persisted with yield on the benchmark 10-year gilt firming up to 7.38% from 7.34% on Friday.
Most global markets remained steady but with a negative bias as investors preferred a wait-and-watch policy. Markets, from Nikkei in Japan to FTSE in the UK to the Dow Jones in the US, either ended marginally lower or were trading near the previous closing marks.
The escalation of the conflict in West Asia has rekindled pessimism in global markets, said Geojit Financial Services’s Vinod Nair. In addition, “the rapid surge in oil prices presents a significant threat to the global market, which is already dealing with elevated inflation and interest rates”. Although analysts are positive about quarterly earnings numbers by leading companies, “geopolitical tensions could potentially disrupt this optimistic outlook”, Nair said.
The impact of the conflict on crude oil prices is expected to be temporary since “neither Israel nor Palestine is a major oil supplier and, so far, the conflict has not directly threatened any major oil production or supply facilities,” Rahul Kalantri of Mehta Equities said in a note. However, market players fear that if the hostilities continue and major oil producing nations in the region take sides, that, along with the recent production cut moves announced by OPEC+ block, could push up crude oil prices. The day’s selling in the stock market left investors poorer by nearly Rs 4 lakh crore with BSE’s market capitalisation now at Rs 319.4 lakh crore.
In the near term, expect the markets to remain volatile amid geopolitical stress and inflationary pressure ahead of inflation data from the US, Europe and China later during the week, said Siddhartha Khemka, head, retail research, Motilal Oswal Financial Services.
In the forex market, the rupee closed nearly unchanged at 83.27 to the dollar, compared to 83.25 on Friday. However, forex traders were cautious about the geopolitical tensions and the hardening of US treasury bill yields. In the domestic government bond market, however, bearish trend persisted with yield on the benchmark 10-year gilt firming up to 7.38% from 7.34% on Friday.
