Summary of this article
Stock markets extended losses due to fresh escalation in West Asia tensions
Nifty traded 0.6 per cent lower, while Sensex fell 0.8 per cent
Indian stock markets extended its fall on April 23 after oil prices rose further on account of fresh tensions in West Asia. Investors remained risk averse due to ongoing geopolitical tensions despite the US extending ceasefire with Iran.
The benchmark Nifty was trading 156.26 points lower at 24,221.85. Meanwhile, the Sensex tumbled 628.45 points to 77,888.04 in early trade. Overnight, US markets gained as it reacted to the extension of ceasefire. However, Asian markets traded mixed as pressures from crude oil prices persisted and as they assessed incoming geopolitical news.
Tensions in the Strait of Hormuz persisted, with Iran reportedly targeting and seizing vessels, while the US continues its blockade in the region. Fresh escalation in tensions led crude oil prices to rise above $100 per barrel. Brent crude oil futures were currently trading at $103.32 per barrel, rising nearly 1.5 per cent from previous session. The Indian rupee also extended its losses falling 94.13 against the US dollar tracking the rise in crude oil prices.
“While the ceasefire extension has improved near-term geopolitical sentiment, tensions persist as the US naval blockade on Iran continues and disruptions in the Strait of Hormuz remain unresolved... Volatility is expected to remain high on account of the geopolitical tension and rising crude oil prices,” Bajaj Broking said in a note.
Losses in broader markets were limited, with the Nifty Smallcap index trading around 0.1 per cent lower, and the Nifty Midcap index trading around 0.3 per cent down. Meanwhile, the Nifty LargeMidcap index traded 0.5 per cent lower during the session.
On the sectoral front, auto and consumer durables dragged down markets, with both indices trading around 1.3 per cent down. Meanwhile, the pharmaceuticals and healthcare sectors outperformed other indices, with the Nifty Pharma trading 0.7 per cent higher and the Nifty Healthcare index trading 0.4 per cent up. The oil and gas sector also traded in green, with the Nifty Oil & Gas trading 0.1 per cent higher.
Within the Nifty 50, Dr Reddy’s was the top gainer, with shares trading 5.8 per cent higher. This was followed by Cipla shares trading 3.8 per cent higher. Meanwhile, shares of Trent traded 3.9 per cent lower, leading the losses in the benchmark index. Shares of Tech Mahindra also fell nearly 2.6 per cent during the session.
“Some consolidation cannot be ruled out after a 2,400-point move in just three weeks. We expect the index to consolidate in the range of 23,800-24,800. Only a breakout above the key resistance area of 24,600 -24,800 will infuse further momentum in the coming weeks. Stock-specific action will continue to remain in focus as we progress through the quarterly earnings session, Bajaj Broking added.
