Sensex recoups losses, ends 52 points lower as investors shrug off US-Iran tensions

MUMBAI: Domestic equity indices recouped most of the days’ losses to end marginally lower on Wednesday.

The market sentiment, however, remained uncertain following Iran's attack on the US-led forces in Iraq. Fears that the raid would lead to an immediate military escalation, although, abated.

BSE benchmark Sensex closed 0.13 per cent or 52 points lower at 40,812, while NSE counterpart Nifty settled at 12,025, down 28 points or 0.23 per cent. Earlier in the day, Sensex declined as much as 393 points while Nifty dropped to 11,930.


Market breadth was weak, with the advance-decline ratio on BSE at nearly 2:3, indicating that for every two stocks that rose, three declined.

Market at a glance:
The broader market performed better than the benchmark as BSE Midcap and Smallcap rose 0.08 per cent and 0.16 per cent, respectively.

Among sectoral indices, BSE Capital Goods index was the top loser with a 1.42 per cent decline, followed by BSE Oil & Gas which shed 0.77 per cent.

Eighteen of 30 stocks in the Sensex pack closed lower. Software exporter Infosys contributed the most losses on Sensex, as it fell 1.32 per cent. L&T and RIL were among other top drags.

Anil Ambani-led companies dragged lower. Reliance Power, Reliance Capital and Reliance Infrastructure shed 4.81 per cent, 5 per cent and 5 per cent, respectively.

Analysts’ views:
"Market is sensing some ease in tension with the view that there will be no effect on equities in the long-term. For the short term, the market will adapt a careful tactic given limited room to grow due to premium valuation and slowdown in the economy. As soon as the situation settles, the market will shift its focus on Q3 results and Budget."
- Vinod Nair, Head of Research, Geojit Financial Services

“Bulls attempt a pullback from the lows of the trading session however, markets are in a fragile state and recoveries are likely to be temporary. Market breadth was on the negative side. Support zone of 11,800 (Nifty) is likely to get tested on the downside as the near term trend is weak. Expect pullbacks to be short lived and traders should have a sell on rise approach for the nifty. 12,100 zone is likely to act as stiff resistance."
- Manav Chopra, head research - equity, Indiabulls Ventures

Global Markets:
Financial markets were roiled after Iran fired missiles at US forces in Iraq, sending Asian stocks and US Treasury yields sliding and jolting oil prices higher as investors feared a wider conflict in the Middle East, according to a Reuters report. European shares dropped as Iranian missile strike on US forces in Iraq saw investors fleeing risk assets amid rampant fears of a military escalation in the Middle East, Reuters reported.

The pan-European STOXX 600 equity index was down 0.5 per cent.

The Shanghai Composite Index and blue-chip stocks both shed more than 1 per cent, marking their largest daily losses since Dec. 23, 2019.