Sensex, Nifty open in red as West Asia conflict, hawkish Fed commentary weigh on sentiment
Indian equity benchmarks opened in the red on Monday, tracking global cues as escalating tensions in West Asia and hawkish commentary from the US Federal Reserve weighed on investor sentiment. The BSE Sensex and the NSE Nifty both declined in early trade, with selling pressure visible across most sectoral indices. Market participants remained cautious amid rising geopolitical risks and expectations of prolonged higher interest rates in the US, which could impact foreign fund flows into emerging markets like India.
The Sensex fell over 300 points in the opening session, while the Nifty slipped below the 19,800 mark, reflecting broad-based selling. Banking, IT, and auto stocks led the decline, while defensive sectors like FMCG and pharma managed to stay relatively resilient. Analysts said the market is likely to remain volatile in the near term as investors track developments in the Middle East and any further signals from the US Federal Reserve regarding its monetary policy stance.
“The combination of geopolitical uncertainty and a hawkish Fed is a double whammy for emerging markets. Investors are de-risking their portfolios, and India is not immune to this selling pressure,” said a market analyst.
Foreign institutional investors (FIIs) have been net sellers in the cash market over the past few sessions, adding to the downward pressure. On the other hand, domestic institutional investors (DIIs) have been providing some support, but their buying has not been enough to offset the selling. The Indian rupee also weakened against the US dollar, trading near record lows, which further dampened sentiment.
| Index | Opening Level | Change (points) | Change (%) |
|---|---|---|---|
| Sensex | 65,945.12 | -345.67 | -0.52% |
| Nifty | 19,742.35 | -98.45 | -0.50% |
| Bank Nifty | 44,120.80 | -210.30 | -0.47% |
The broader market also witnessed selling, with the BSE Midcap and Smallcap indices trading lower by around 0.4% each. Sectorally, the Nifty IT index fell over 1% due to concerns over US demand, while the Nifty Auto index declined on weak monthly sales data. Meanwhile, the Nifty Metal index also slipped as global commodity prices softened on demand worries.
Market breadth was negative, with about two declining stocks for every advancing stock on the BSE. Analysts suggest that the near-term outlook remains clouded by global factors, and any further escalation in the West Asia conflict could trigger more downside. However, they also note that valuations have become more reasonable after the recent correction, which could attract long-term investors.
For traders, key support for the Nifty is seen at 19,650, followed by 19,500, while resistance is placed at 19,900 and 20,000. A decisive break below the support level could lead to further selling, while a recovery above the resistance may bring some relief. Investors are advised to stay cautious and focus on quality stocks with strong fundamentals.
As the session progresses, market participants will keep a close watch on the movement of crude oil prices, the rupee-dollar exchange rate, and any fresh geopolitical headlines. The upcoming US Federal Reserve meeting minutes and economic data releases will also be crucial in shaping market direction in the coming days.
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