Indian equity benchmarks came under heavy selling pressure on Thursday, June 12, halting a six-day winning streak as investors opted to book profits amid weak global cues and rising geopolitical tensions. Both the SENSEX and NIFTY50 witnessed sharp declines, led by a sell-off in index heavyweights.
By 2:29 PM, the SENSEX was down 909 points at 81,608, while the NIFTY50 had shed 281 points, trading just above the 24,850 mark at 24,862.
What’s Behind Today’s Market Slide?
1. Weak Global Cues and Geopolitical Tensions
Global markets turned risk-averse after reports surfaced of rising tensions between Iran and Israel. The Washington Post reported that the U.S. is on high alert amid concerns that Israel may unilaterally strike Iran’s nuclear facilities. In response, The New York Times noted that Iranian military and government officials have already begun discussing potential countermeasures.
This uncertainty rippled through global equity markets:
- Hong Kong’s Hang Seng fell 1.42%
- Japan’s Nikkei declined 0.68%
- Germany’s DAX dropped 1.43%
- UK’s FTSE 100 slipped 0.1%
- France’s CAC 40 shed 0.82%
U.S. stock futures also hinted at a weaker open, with Dow Futures down 0.5% or 214 points.
2. Crude Oil Spike Hits Sentiment
Escalating tensions in the Middle East sent crude oil prices soaring — bad news for India, which imports a majority of its oil. Rising oil prices are inflationary and could pressure India’s trade balance and fiscal health, souring investor sentiment.
3. Heavyweights Lead the Decline
Major blue-chip stocks dragged the benchmarks lower. Notable names like Larsen & Toubro, HDFC Bank, Reliance Industries, Infosys, ICICI Bank, and Mahindra & Mahindra were among the biggest contributors to the market’s fall, collectively erasing nearly 400 points from the SENSEX.
4. Sector-Wide Selloff
The pain was broad-based:
- NIFTY Realty plunged 2%
- Consumer Durables, Metals, PSU Banks, FMCG, Auto, and Financial Services indices all slipped between 1% and 1.7%
- The NIFTY Midcap 100 and Smallcap 100 fell 1.45% and 1.65%, respectively
5. NIFTY50 Gainers & Losers
Out of the 50 NIFTY constituents, 43 were in the red:
- Tata Motors led the losers, dropping 3.12% to ₹713
- Other laggards included Tata Steel, L&T, Coal India, Titan, Shriram Finance, Jio Financial Services, and Trent, falling between 2% and 2.6%
However, not all was gloom and doom:
- Bajaj Finserv, Apollo Hospitals, ONGC, Asian Paints, and Wipro managed to buck the trend and trade in the green.
Market Breadth Remains Weak
The overall market sentiment remained negative. On the BSE, 2,722 stocks were declining, while only 1,225 advanced, highlighting the broad-based nature of the correction.
Bottom Line:
Today’s steep correction reflects heightened caution among investors amid global uncertainties and profit-taking after a strong rally. Traders should brace for continued volatility as geopolitical developments and oil prices remain key variables in the days ahead.
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