The benchmark equity indices experienced a significant decline on October 3, 2024 following escalating tensions in West Asia. The NSE Nifty 50 dropped to 25,401, down 1.51 per cent, while the BSE Sensex stood at 82,980.64, reflecting a decrease of 1.53 per cent. All broader indices registered losses of over 1 per cent, with the Bank Nifty index fell by 1.38 per cent.
In contrast, Japan’s Nikkei 225 Index gained 2 per cent today, indicating a different trend in other Asian markets.
Top Gainers And Losers
The top gainers on the National Stock Exchange (NSE) were Angel One, up by 6.88 per cent; Petronet, up by 5.19 per cent; JSW Steel, up by 1.51 per cent; and Tata Steel, up by 1.32 per cent. Other gainers were ONGC, up 0.12 per cent; Adani Enterprises, up 0.14 per cent; and NTPC, up 0.11 per cent.
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On the other hand, Dabur, Hindustan Petroleum, and Eicher Motors were among the top losers, declining by 5.65 per cent, 5.29 per cent, and 2.29 per cent, respectively. BPC, Wipro, Tata Motors also faced significant losses.
Major contributors to the decline from the Sensex included Reliance Industries, HDFC Bank, ICICI Bank, M&M, L&T, and Bharti Airtel.
Tensions In Middle East
The ongoing war in the Middle East has not only led to a reversal in oil price trends, but also highlighted India’s continued energy dependence on the Middle East.
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India’s oil imports from Russia dropped to 36 per cent in August, while imports from the Middle East surged to 44.6 per cent. So, tensions in West Asia can have a significant impact on Indian markets and oil imports. Traders are already aware that after a year of conflict in the Middle East, there is no significant disruption to oil supplies.
FII Outflows To China
Meanwhile, foreign institutional investors (FIIs) have withdrawn over $1 billion from India’s market on October 1, 2024 in response to Beijing’s stimulus package. The Chinese stock market has seen a significant recovery, with the CSI300 index surging 25 per cent in a week, while the Hang Seng index has gained 16 per cent. CSI300 had earlier plummeted by more than 45 per cent from its peak in 2021 to mid-September.
The Chinese stock market has seen a resurgence, but the impact on the Indian market is expected to be minimal due to strong domestic investments. Experts doubt that active foreign portfolio investors (FPIs) will sell a significant portion of their Indian holdings to move funds to China. Also they feel that mutual funds and non-institutional investors will continue with their price-sensitive buying strategy. As Chinese markets will be closed for the rest of the week, so the full extent of FII outflow can only be assessed once trading resumes.
