NEW DELHI: Domestic equity market witnessed its first decline of calendar year 2024 as tensions in the Red Sea escalated in recent days and prompted investors to press the sell button. Local benchmark indexes fell by a half percentage points on Tuesday with the BSE Sensex closing below the 72,000 mark.
At close, Sensex was down 379.46 points or 0.53% at 71,892.48, while the broader NSE Nifty50 was down 76.10 points or 0.35% at 21,665.80. “The ongoing conflict in the Red Sea has been making investors jittery as any flare up in violence could trigger upsurge in oil prices and weigh on the economy,” said Prashanth Tapse, Senior VP (Research), Mehta Equities.
According to latest developments, one of the world’s largest shipping companies, Maersk, again halted operations temporarily after maritime escalation between Yemen’s Houthis and US forces. Houthi rebels have been launching attacks on ships it identified as being linked to Israel that passed through the Bab el-Mandeb strait into the Red Sea. This has already forced many companies to take a longer and costlier route via the Cape of Good Hope to facilitate trade activity.
Vinod Nair, head of research at Geojit Financial Services, said on Tuesday the market extended Monday’s last hour’s sell-off, taking negative cues from Asian peers due to weak Chinese manufacturing data and mounting tensions in the Red Sea, which has the potential to disrupt global trade and crude supplies.
Nair added that ahead of the impending results season, investors are adopting a profit booking strategy. Auto stocks declined on below-expected volume numbers, while pharma stocks were the standout due to catch-up in the US economy.
Top losers in the 50-share Nifty pack were Eicher Motors, M&M, UltraTech Cement, L&T and Kotak Mahindra Bank which fell between 2.3% and 3.6%. Meanwhile, shares of Vodafone Idea fell over 5% after it denied that it was in talks with Elon Musk-promoted Starlink to manage its services in India.