Meanwhile, the market capitalisation of all listed companies on BSE declined by Rs 6 lakh crore to Rs 393.77 lakh crore.
Devarsh Vakil – Deputy Head, of Retail Research, HDFC Securities expects Israel-Iran conflict, domestic and global economic macroeconomic data, crude oil prices, January-March quarter results for Q4FY24, general elections 2024, and global cues to keep investors on their toes and guide market direction this week.
Vakil forecasted Nifty to now head towards the next major supports of 22,303-22,142 in the coming sessions. “As the intermediate uptrend is intact, we expect any correction to halt at lower levels and the intermediate uptrend to resume,” he added.
Key Reasons For The Stock Market Crash Today
Iran-Israel Conflict
Iran Saturday night launched a drone missile attack on Israel. This was in response to a suspected Israeli strike on its consulate in Damascus on April 1 in which seven Iranian Revolutionary Guard Corps personnel, including two generals, were killed.
Meanwhile, Sensex and Nifty experienced sharp declines on Monday as equity investors expressed concerns about the repercussions of Iran’s unprecedented full-scale military attack on Israel.
Global Cues
Markets in Asia began the week on a cautious footing. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.7% after Iran had, late on Saturday, launched explosive drones and missiles at Israel.
Japan’s Nikkei slid more than 1%, while Australia’s S&P/ASX 200 index lost 0.6%. Hong Kong’s Hang Seng Index slumped 0.8%.
Treasury Yields Maintain Recent Peaks
US Treasury yields held near their recent highs as traders pared back their expectations of the pace and scale of rate cuts from the Federal Reserve this year.
The benchmark 10-year yield last stood at 4.5277%, while the two-year yield held near the 5% level and was last at 4.8966%.
Rupee Falls
The Indian rupee fell 5 paise to 83.36 against the US dollar in early trade. The dollar index, which monitors the performance of the greenback against a basket of six major world currencies, was at the 105.94 level.
Meanwhile, the dollar scaled a fresh 34-year high against the yen on growing expectations that sticky inflationary pressures in the United States will keep rates there higher for longer.
Crude Oil Price
Oil prices, however, hardly reacted to the news, as traders had largely priced in a retaliatory attack from Iran that would likely further disrupt supply chains. That saw Brent crude futures peaking at $92.18 a barrel last week, the highest level since October.
Brent was last 0.5% lower at $90.01 per barrel, while U.S. West Texas Intermediate crude futures fell roughly 0.6% to $85.13 a barrel.
Nifty Technical
Anand James, Chief Market Strategist, Geojit Financial Services believes that if Nifty does not close above 22,200 or falls further below 21,800, it could confirm the break of bullish structure that had 23,200 in the horizon and line-up 20,300 instead.
Should You Buy The Dip?
Narendra Solanki, Head Fundamental Research – Investment Services, Anand Rathi Shares, and Stock Brokers, said: “Today’s fall was more due to global factors specially Israel/Iran situation and uncertainty clouding near-term play of events. These are uncontrollable risks which arise in markets now and then and long-term investors should not panic in such situation but rather can look at it as an opportunity to bargain and add good stocks for investments.”
Focus on long-term investment goals and avoid making hasty changes to your portfolio based on short-term events, said experts. Assess your portfolio’s risk tolerance. If you’re risk-averse, consider rebalancing your portfolio to include a higher allocation of safer assets like bonds or defensive stocks.
“If the market goes down due to an external factor outside its control but the fundamentals are still strong, it is time to use the dip to buy your favourite stocks at a good price, but please do not panic sell,” said Ali Azhar, CA and NISM Registered RA.
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