The Indian stock market witnessed a sharp fall on Monday, as investors turned cautious amid escalating geopolitical tensions in the Middle East and rising crude oil prices. The BSE Sensex plunged 483 points, or 0.74%, to close at 65,512, while the NSE Nifty dropped 141 points, or 0.72%, to settle at 19,512. All the sectoral indices on the Nifty ended in the red, with financials, consumer discretionary, and realty being the worst performers.
The market sentiment was also dampened by the weak global cues, as most of the Asian and European markets traded lower on Monday. The US markets were closed for a holiday. The investors were worried about the potential impact of the Israel-Palestine conflict on the global oil supply and demand. The Brent crude futures surged to $86.58 per barrel, the highest level since October 2018.
IT stocks buck the trend
Among the few gainers on Monday, the IT stocks stood out as they benefited from the strong quarterly results and upbeat outlook of the sector. The Nifty IT index rose 0.8%, outperforming the broader market. HCL Tech, TCS, and Wipro were among the top contributors to the Sensex gains.
The IT companies have reported robust revenue growth and margin expansion in the second quarter of FY24, driven by the increased demand for digital transformation and cloud services amid the pandemic. They have also raised their full-year guidance and announced hefty dividends and buybacks for their shareholders.
Adani group stocks under pressure
On the other hand, the Adani group stocks faced heavy selling pressure on Monday, as they continued to reel under the regulatory scrutiny and media reports alleging financial irregularities. Adani Ports was the top loser on the Nifty, falling 6.4%. Adani Power, Adani Transmission, Adani Total Gas, and Adani Green Energy also declined between 4% and 7%.
The Adani group has been facing allegations of inflating its net worth and shareholding structure by a foreign media outlet. The group has also been under the scanner of various regulators, including SEBI, DRI, and CBDT, for alleged violations of securities laws and tax evasion. The group has denied any wrongdoing and said it is cooperating with the authorities.
Outlook for the week ahead
The market is likely to remain volatile in the coming days, as it will react to the domestic and global developments. The inflation data for September will be released on Tuesday, which will provide cues on the monetary policy stance of the RBI. The corporate earnings season will also pick up pace, with some of the key companies such as Reliance Industries, HDFC Bank, ICICI Bank, and Infosys announcing their quarterly results this week.
The market will also keep an eye on the Israel-Palestine conflict and its implications for the oil prices and global stability. The investors will also look for cues from the US markets, which will resume trading on Tuesday after a long weekend.
