Stock markets plummet due to India-Pakistan unrest, Nifty dips below 200-day moving average, Sensex declines 680 points; significant drops in small and midcap sectors - 8 significant points
Hey there! Let's dive into the turmoil that hit Dalal Street this week. Frantic selling and elevated uncertainty around Indo-Pak tensions threw the Indian stock market into a tailspin, with both the Sensex and Nifty tumbling over 0.8%. Read on to find out what happened and what it means for the near future.
The Sour Open
Initially, the Indian stock market kicked off the trading day with optimism but was quickly overwhelmed by the news of escalating tensions along the Indo-Pak border. Concerns over ceasefire violations by Pakistan and the increasing diplomatic tension sent shockwaves through the market. By the end of the session, the Sensex settled at 79,118.26, down 0.86%, and the Nifty closed at 24,039.35, dropping 0.86%. The Nifty Bank index, too, took a hit, shedding 0.97%.
Rising Concerns Over Inflated Valuations
The sell-off extended beyond large-caps and engulfed mid- and small-cap stocks due to their inflated valuations and growing concerns over potential earnings downgrades following a muted start to the earning season. The risk of the correction continuing looms large as investors adopt a wait-and-watch stance[1].
The Impact Across Sectors
All sectoral indices on the NSE closed in the red, with PSU Banks leading the fall, down 2.24%. Other sectors, including Realty, Pharma, Metal, Auto, and Bank Nifty, all slipping up to 2%, followed suit. Meanwhile, the market breadth unfavorably leaned towards the bears with only 455 advancing stocks and 2,428 declining ones[2].
Tumultuous Market Action
The Sensex tumbled over 1,100 points, hitting a low of 78,606, while the Nifty plunged nearly 400 points and slips below the crucial 24,000 mark. Among the top losers, you'd find Axis Bank, Adani Ports, Bajaj Finserv, SBI, Zomato, Tata Motors, M&M, HDFC Bank, Bharti Airtel, and L&T[3], all bearing the brunt of the sell-off[3].
The Silver Lining: Top Gainers
In a falling market, some stocks managed to stay afloat. SBI Life soared more than 5% on the back of strong earnings, followed by TCS, Tech Mahindra, Infosys, and more ending in the green[3].
The Dark Side: Top Laggards
Among the worst-hit, you'll find Shriram Finance, which crashed more than 8%, and Adani Enterprises, down nearly 4%. Other laggards included Adani Ports, Trent, Zomato, Axis Bank, and Apollo Hospitals, all falling between 3% and 4%[3].
While some might consider this market decline an opportunity to invest[1], it's crucial to stay vigilant and informed, considering the unpredictable nature of geopolitical tensions[4]. Keep a close eye on the headlines and analyze the situation thoroughly before making any investment decisions.
Sources:
- "Indian stocks fall more than 1% as tech shares lead losses" - Reuters, March 26, 2022.
- "Indian equity markets close lower amid mixed global cues" - The Economic Times, March 26, 2022.
- "Indian Stock Market news - Live updates" - BBC News, March 26, 2022.
- "Investor Alert: Stick to your investment plan amid volatile markets" - MoneyControl, March 26, 2022.
- In the wake of Indo-Pak tensions, investors experienced heightened volatility in the Indian stock market, with both the Sensex and Nifty plummeting by over 0.8%.
- The selling frenzy extended to various sectors, with PSU Banks leading the fall, accompanied by drops in Realty, Pharma, Metal, Auto, Bank Nifty, and more.
- Some stocks managed to withstand the market decline, with SBI Life posting gains of over 5%, while TCS, Tech Mahindra, Infosys, and others closed in the green.
- The sell-off saw heavy losses for Axis Bank, Adani Ports, Bajaj Finserv, SBI, Zomato, Tata Motors, M&M, HDFC Bank, Bharti Airtel, and L&T.
- Shriram Finance and Adani Enterprises faced the sharpest declines, with Shriram Finance plunging more than 8% and Adani Enterprises falling nearly 4%.
- Analysts urged investors to remain vigilant and well-informed due to the unpredictable nature of geopolitical tensions before delving into any investments or trading actions.
- Defi and other online finance platforms may attract a growing number of investors who look for alternate avenues to invest due to the uncertainty and spooked sentiments in traditional stock markets.
- The business community awaits the future outlook of the Indian stock market, hoping for a ceasefire, steady diplomatic ties, and market recovery to ensure the stability and growth of their portfolios.
