Markets slump on heightened tensions in Middle East; Sensex drops 500 pts

The entry of the US into the Israel-Iran conflict heightened tension as panic selling by investors triggered a major correction in early trade. Also, if oil prices shoot up rapidly due to the ongoing war, higher import bills would lead to a fast decline in the local currency against the dollar and weigh on inflation.

“However, FIIs turning out buyers of local shares worth over Rs 10,000 crore in the past 4 sessions shows that India’s strong fundamentals continue to attract foreigners despite global uncertainty,” Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

The US bombed three major nuclear sites — Fordow, Natanz and Isfahan — in Iran, directly engaging itself in the Israel-Iran conflict.

From the Sensex pack, HCL Tech, Infosys, Larsen & Toubro, Mahindra & Mahindra, Hindustan Unilever, ITC, Tata Consultancy Services and Maruti were the biggest laggards.

In contrast, Trent, Bharat Electronics, Bajaj Finance and Kotak Mahindra Bank were among the gainers.

The BSE smallcap gauge climbed 0.57 per cent, and the midcap index rose 0.20 per cent.

Among BSE sectoral indices, BSE Focused IT lost 1.48 per cent, IT tanked 1.46 per cent, teck (1.10 per cent), auto (0.88 per cent), FMCG (0.62 per cent), telecommunication (0.50 per cent) and bankex (0.38 per cent).

Capital Goods jumped 0.94 per cent, services (0.73 per cent), metal (0.71 per cent), commodities (0.46 per cent) and consumer durables (0.38 per cent).