India’s stock market fell by 1% on Thursday, hurt by renewed geopolitical tensions between Israel and Iran, and volatility ahead of the weekly Nifty futures and options (F&O) expiry. A London-bound Air India plane crashed soon after taking off from Ahmedabad, further denting investor sentiment.
The Nifty 50 index closed 1.01%, or 253 points, lower at 24,888.20 on Thursday – its steepest decline since 20 May. The 30-share Sensex fell 1%, or 823 points, to settle at at 81,691.98. The market sell-off was broad-based, with the Nifty Smallcap index falling 1.44% and the Nifty Midcap index closing 1.6% lower.
The texture of the market also appears bearish for now as Nifty saw a heavy build-up of calls. The fall in the Nifty 50 index was also accompanied by a jump of 7% in open interest of active Nifty futures contract.
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The Nifty has once again approached the support zone of its short-term moving average — the 20-day EMA — which currently lies around the 24,800 mark. “A decisive break below this level could lead the index back into a consolidation phase,” said Ajit Mishra, senior vice-president, research, Religare Broking Ltd.
The BSE market capitalization fell by ₹6.09 trillion to ₹$5.26 trillion.
A fresh flare-up in geopolitical tensions in the Middle East – media reports suggest Israel is preparing for military strikes against Iran – triggered a sell-off in other Asian markets as well. Except for South Korea’s Kospi index, all Asian indices closed in the red. Among the ones that fell the most were Hong Kong’s Hang Seng index, down 1.31%, followed by Taiwan’s Taiex that lost 0.81%, and Japan’s Nikkei index that declined 0.65%.
Germany’s DAX index was down 1.01% and the Euro Stoxx 50 index fell 0.86%.
“With returns expected to largely moderate to around 10-12% as opposed to high double digits of the past years, one needs to tread very cautiously in this market,” said Nilesh Shah, managing director at Kotak AMC, adding that asset allocation was key.
An Air India flight, with 242 passengers on board, crashed in Ahmedabad during take-off for London. The incident happened between 1 pm and 2 pm on Thursday.
“There appears to be no survivor in the crash,” Ahmedabad police commissioner G.S. Malik told AFP. “And since the airplane has fallen on an area which was residential and had some offices, there are more casualties as well”.
“We have retrieved 204 bodies and 41 injured persons taken to hospital,” Malik said.
Alok Agarwal, head of quant and fund manager at Alchemy Capital Management, said that the Q4FY25 earnings of Nifty 500 grew by over 11%, though this average was dragged down by the Nifty 50 companies, which posted only about 3% growth.
“Excluding the top 50 companies of the Nifty 500, the remaining 450 companies showed a strong earnings growth of over 20%, indicating broad-based strength in the market, in our view. While the headline numbers appear modest due to the underperformance of large-cap companies, the overall Q4FY25 earnings season has been reasonably good.”
All the sectoral indices except for the Nifty Healthcare index closed in the red. The Nifty Realty index lost the most– 2.02%, while the Nifty Energy and Nifty Consumer Durables index fell 1.93% and 1.92% respectively.
Market breadth on the NSE was negative, with 2,111 stocks declining compared to 782 stocks that advanced.
On Thursday, the index heavyweight Reliance Industries sold 35 million equity shares of Asian Paints at ₹2,201 per share.