Closing bell: Geopolitical tensions drag market lower; Sensex ends down by 511 pts, Nifty below 25,000

The Indian equities market ended lower on Monday, in sync with its Asian peers, as tensions in the Middle East took centre stage, following a significant escalation involving the American bombing of three nuclear facilities in Iran and potential retaliatory measures from Tehran. 

Paring half of its early losses, the BSE Sensex closed the week's first trading session at 81,896.79, down 511.38 points, or 0.62%, after falling by as much as 1% in opening deals. Similarly, the NSE Nifty50 settled at 24,971.90, lower by 140.50 points, or 0.56%.

Outperforming the benchmark indices, the broader markets ended in positive terrain, with the Nifty Midcap100 and the Smallcap100 indices gaining 0.36% and 0.70%, respectively. 

Among the BSE Sensex firms, 21 of the 30 stocks ended in the red, led by Infosys , Larsen & Toubro , HCLTech , Mahindra and Mahindra , and Hindustan Unilever , falling in the range of 2.3-1.3%. On the other hand, Trent , Bharat Electronics , Bajaj Finance , Kotak Mahindra Bank , and Bajaj Finserv were the Top 5 gainers, adding 3.6-0.6%.

Among sectors, IT, auto, and FMCG were among the top laggards, while metal, consumer durables, pharma, and media settled in positive terrain.

“Despite the initial setback, the market recovered most of its losses, supported by gains in capital goods and metal stocks, as fears of an immediate oil supply disruption remained low. Meanwhile, IT stocks came under pressure due to the uncertainty around global tech spending, exacerbated by weak earnings reported by Accenture," said Vinod Nair, Head of Research, Geojit Investments.

Shares of Indian information technology (IT) companies witnessed selling pressure on Monday, with index heavyweights Tata Consultancy Services (TCS), Infosys, HCLTech, and Wipro falling by up to 3%, after shares of Accenture crashed over 7% on the U.S. bourses on Friday. The sentiment was dented by Accenture's subdued guidance as the IT major pegged the annual revenue growth guidance in the range of 6-7%.

Technical outlook

Technically, the Nifty recovered significantly after a gap-down opening amid weak geopolitical sentiment. A pullback in crude oil prices helped the Indian market pare some of its morning losses, although it still ended on a negative note, said Rupak De, Senior Technical Analyst at LKP Securities.

“For the day, the Nifty managed to close above the support level of 24,850, and Indian equities may continue to offer buying opportunities as long as the Nifty sustains above this level. On the higher side, if it moves above 25,000, it may head towards 25,350 in the short term," he said.

“This has been a recurring trend for the past five weeks, where the Nifty shows a decisive move on the last trading day of the week but fails to sustain it as the new week begins, remaining stuck within the broader range of 24,400–25,200,” said Ajit Mishra, SVP-Research, Religare Broking.

Looking ahead, in the absence of any major domestic triggers, global market performance and crude oil price movement will be key in setting the tone. He advised participants to avoid aggressive bets and instead focus on selective stock picking based on relative strength during this consolidation phase.

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