Stock market shows sharp rise after concerns over US-Iran tensions

July 9, 07:00

On Thursday, the fourth trading day of the week, both market indices—BSE Sensex and NSE Nifty—demonstrated a confident recovery and began trading with strong momentum. The BSE Sensex immediately jumped by more than 380 points upon opening and surged by over 500 points just ten minutes into trading, exceeding the 77,000 mark.

Similarly, the NSE Nifty showed a rise of more than 150 points. Previously, following Donald Trump's statement that peace talks with Iran were a waste of time, the indices had plummeted. The BSE Sensex closed with a fall of over 1,600 points, and the NSE Nifty ended trading down by more than 500 points.

Index Recovery Dynamics

As a result of this daily decline, investors lost about 9 lakh crore rupees. However, the losses from Wednesday were completely offset on Thursday at the market open. The Sensex opened at 76,576, higher than the previous close of 76,503, and then sharply rose by more than 500 points, reaching 77,019.

The NSE Nifty followed suit, opening at 23,928 compared to the previous close of 23,882, and its growth pace accelerated, surpassing the 24,000 mark by more than 150 points.

Market Growth Leaders

The main drivers of this significant growth were stocks across various categories. In the large-cap category on BSE, leaders included Eternal Share (4%), SunPharma Share (2.70%), and Bharti Airtel Share (around 2%). Additionally, major stocks such as Asian Paints, ICICI Bank, Titan, Reliance, Trent, and HUL were in the green zone with gains exceeding 1%.

In the mid-cap segment, stocks like Dixon Share (4.40%), Laurus Labs Share (3.30%), Godrej Properties Share (2.80%), and Nykaa Share (2%) saw growth. In the small-cap category, leaders were Welcorp Share (5%), IIFL Share (3.70%), and PGEL Share (3.60%).

Reasons for Growth Despite Oil Prices

The renewed conflict between the US and Iran led to a significant jump in crude oil prices, with Brent Crude approaching $80 per barrel. Nevertheless, the market managed a powerful reversal. One of the key factors in this turnaround was the active accumulation of assets (Value Buying) at low levels during the previous sharp decline.

Furthermore, the India VIX index, which serves as a measure of market fear, also decreased. The volatility indicator for the coming days fell by approximately 7%, whereas it had increased by almost 30% in the last hour of the previous trading session.

www.aajtak.inJuly 8, 07:20

Tensions between the US and Iran, the situation in the Strait of Hormuz, and oil prices caused panic in the stock market

The stock market is once again experiencing an atmosphere of anxiety, accompanied by a significant drop immediately after the opening of trading. On Wednesday, as soon as the trading session began, the BSE Sensex index lost more than 550 points, and the NSE Nifty index fell by approximately 150 points. It should be noted that both indices also closed in negative territory on the previous business day.

Reasons for the Index Decline

Expectations of such a decline in the market were predicted in advance, as they are directly linked to the Strait of Hormuz, which is critically important for meeting about 20% of global oil demand. Currently, the confrontation between the US and Iran has intensified again, with attacks being carried out from both sides.

Sensex and Nifty Trading Dynamics

Immediately after the start of trading, the Sensex showed a decrease compared to the previous closing level of 78,180 points. In just five minutes of trading, it fell by more than 550 points, reaching the level of 77,611. Similarly, the Nifty index also showed a downward trend. It opened at 24,398 points but quickly dropped to 24,259, and then, following the movement of the Sensex, continued to fall, closing trading at 24,229 with a decline of more than 150 points.

Geopolitical Factors in the Market

The market anxiety is due to its connection with events in the Middle East. The primary cause is the escalation of tensions between the US and Iran. Earlier, Iran launched a missile attack on three commercial vessels passing through the Strait of Hormuz, to which the US responded with powerful strikes on Iranian targets.

Impact on Asian Markets

This mutual tension led to volatility in global stock markets. Stock markets, from the US to South Korea, began trading in a declining trend, which negatively affected the sentiment of the Indian market. For example, the Japanese Nikkei fell by more than 500 points, and the Korean Kospi traded with a decline of more than 1%, while the Gift Nifty was also in negative territory.

Rise in Crude Oil Prices

The third factor contributing to the market decline is the impact of news about attacks by the US and Iran on international crude oil prices, which caused a sharp jump in prices. The price of Brent Crude Oil exceeded the mark of $76 per barrel, showing a rise of more than 3%, and the price of WTI Crude Oil also exceeded $72.

Panic Selling Among Shareholders

Amid this significant decline in the stock market, shares from the large company category of BSE were most affected. These included IndiGo Share (down 2.50%), Asian Paints Share (down 2.42%), Reliance Share (down 2.10%), Bajaj Finance Share (down 1.70%), ITC Share (down 1.60%), and M&M Share (down 1.50%). Additionally, mid-sized stocks, such as Hindustan Petroleum Share (down 3.60%) and Ashok Leyland Share (down 2.60%), were also trading in the red. In the small company segment, NBCC Share (2.20% drop) and PNB Housing Finance Share (2.10% drop) were observed.

Similar stories

Popular