The BSE Sensex slipped 1.3 per cent in intra-day trade today, after falling 1.7 per cent on Wednesday. In the past nine trading days, the benchmark index closed lower by over 1 per cent on seven occasions. The Sensex tanked 7.8 per cent during this period.
The Indian equity benchmark took a significant hit, erasing recent gains as US-Iran triggered geopolitical tensions and oil supply fears weighed heavily on investor sentiment.
Five stocks – HDFC Bank, Tata Consultancy Services (TCS), Infosys, Kotak Mahindra Bank and Trent – from the 30-share Sensex hit their 52-week lows in intra-day trade today.
Amara Raja Energy, Swiggy, Colgate-Palmolive, Bata India, GAIL (India), ITC Hotels, Jubliant FoodWorks, L&T Technology Services, Shree Cement, Tata Chemicals, Tata Motors Passenger Vehicles and Varun Beverages were among 55 stocks from the BSE 500 index hitting their respective 52-week lows.
On Thursday, Indian equity markets opened with a sharp gap-down, reflecting heightened global uncertainty and rising risk aversion among investors. The immediate trigger for the decline was the sharp surge in crude oil prices, with Brent crude approaching the $100 per barrel mark following escalating geopolitical tensions involving the US, Israel, and Iran in West Asia.
Another key factor weighing on sentiment is the persistent selling by Foreign Institutional Investors (FIIs). Since the beginning of March, FIIs have remained consistent net sellers in the Indian market, pulling out more than ₹21,000 crore, which has created additional, pressure on large-cap indices, particularly banking and financial stocks.
On the domestic front, macroeconomic stability remains largely intact, although higher energy prices could create some near-term pressure on the current account deficit and currency. Encouragingly, corporate earnings have begun to recover after several weak quarters, with recent results showing a return to double-digit growth for large caps and stronger momentum in mid- and small-caps, said Shridatta Bhandwaldar, CIO – Equities, Canara Robeco Asset Management Company.
With markets having consolidated for the past 15–18 months and valuations in several segments moving closer to fair levels, the earnings-valuation equation is gradually improving. In this environment, periods of volatility could provide opportunities for investors to incrementally increase equity exposure from a medium-term perspective, added Shridatta Bhandwaldar. Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers’ discretion is advised. (Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt. Ltd.)