Why Did the Indian Stock Market Open in the Red Amid Rising Israel-Iran Tensions?

Mumbai, June 13 (NationPress) The Indian benchmark indices opened significantly lower on Friday as tensions heightened between Israel and Iran. There was a noticeable wave of selling in the auto, IT, Financial Services, and PSU Bank sectors during the initial trading hours.

As of approximately 9:33 am, the Sensex was down by 896.5 points or 1.10 percent, sitting at 80,795.44, while the Nifty fell by 278.5 points or 1.12 percent, reaching 24,609.70.

The Nifty Bank index recorded a drop of 633.80 points or 1.13 percent, now at 55,448.75. The Nifty Midcap 100 index traded at 57,836.95, down by 603.90 points or 1.03 percent. Meanwhile, the Nifty Smallcap 100 index was at 18,272.30, down by 192.75 points or 1.04 percent.

Experts indicate that the economic repercussions of the Israeli military actions could be substantial if the conflict with Iran continues. Israel has announced that its operations are expected to extend over several days.

“The market's reaction will heavily depend on the duration of the conflict. In the short term, we are likely to see a risk-off sentiment. Sectors reliant on oil derivatives—such as aviation, paints, adhesives, and tyres—are expected to be particularly affected. Conversely, oil producers like ONGC and Oil India should remain stable,” stated Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd.

Analysts noted that the Nifty had already declined by over one percent the previous day, as geopolitical tensions in the Middle East intensified. This morning, following preemptive Israeli strikes on Iran, a widespread risk-off sentiment swept through the markets.

“From a technical standpoint, we had indicated that Wednesday's 'buyer rejection' candle, which followed the bearish 'upside gap two crows pattern' earlier in the week, was a sign of caution,” remarked Akshay Chinchalkar, Head of Research at Axis Securities.

Among the Sensex constituents, Tata Motors, L&T, PowerGrid, Kotak Mahindra Bank, SBI, Titan, and Infosys were among the top performers.

In the wider Asian markets, cities like Hong Kong, Bangkok, Jakarta, Japan, Seoul, and China were also trading in the red.

In the last trading session, the Dow Jones in the US finished at 42,967.62, up by 101.85 points, or 0.24 percent. The S&P 500 gained 23.02 points, or 0.38 percent, concluding at 6,045.26, and the Nasdaq closed at 19,662.49, up by 46.61 points, or 0.24 percent.

Foreign institutional investors (FIIs) continued their selling spree for the second consecutive day, offloading equities worth Rs 3,831.42 crore on June 12, while domestic institutional investors (DIIs) purchased equities worth Rs 9,393.85 crore on the same day.