1 october 2024 : Equity benchmark indices, Sensex and Nifty, experienced a significant decline, primarily due to falling heavyweight stocks like Reliance Industries, HDFC Bank, and ICICI Bank, alongside rising tensions in the Middle East. The BSE Sensex dropped 1,264.2 points to reach 83,002.09, while the NSE Nifty fell 345.3 points to 25,451.60.
Key Gainers and Losers
Among the 30 firms in the Sensex, major laggards included Tata Motors, Asian Paints, Larsen & Toubro, Axis Bank, Mahindra & Mahindra, Reliance Industries, Maruti, Kotak Mahindra Bank, ICICI Bank, and HDFC Bank. In contrast, JSW Steel, Tata Steel, Sun Pharma, and NTPC saw gains. The total market capitalization of all listed companies on the BSE decreased by ₹5.63 lakh crore, bringing it down to ₹469.23 lakh crore.
Reasons for the Decline
Regulatory Changes by Sebi: The market regulator, Sebi, has tightened regulations in the futures and options (F&O) segment, limiting weekly expirations to one per exchange and increasing contract sizes, which may lead to reduced trading volumes.
Escalating Conflict: The stock market slump coincides with escalating hostilities between Iran and Israel. The Israeli military confirmed the deaths of eight soldiers during operations in southern Lebanon, following Iranian missile strikes targeting Tel Aviv. The military chief of Israel has warned of an impending response.
Rising Crude Oil Prices: Oil prices surged amid the escalating tensions, raising concerns about supply disruptions from major producers. Brent crude oil briefly exceeded $75 per barrel, while West Texas Intermediate climbed past $72, with both benchmarks increasing nearly 5% over the past three days. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that any Israeli attack on Iranian oil installations could significantly spike crude prices, which would be detrimental for oil-importing countries like India.
