Markets attempted a rebound on Monday, erasing some losses incurred during the morning trading session, however, failed to stage a complete rebound as tensions on the geopolitical front persisted. Benchmark indices concluded the trading session in the red territory, witnessing a decline of around 0.6%.
BSE Sensex closed at 81,896.79 level mark, down by over 511 points or 0.62%. The Nifty50 index followed suit and ended below the psychological 25k level mark. As per analysts, the weak start was largely owing to escalating tensions in West Asia, especially with the US entering the conflict. On June 22, the US launched targeted strikes on Iran's three major nuclear facilities. This move dashed all hopes around a prospective breather in tensions between Iran and Israel.
"The unexpected US airstrike on Iran’s nuclear facilities over the weekend disrupted those expectations, triggering a sharp rise in crude oil prices and leading to consolidation in the domestic equity market. 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," said Vinod Nair, head of research, Geojit Investments.
Top Gainers & Losers
Infosys, Hindustan Unilever, L&T, HCL tech and Mahindra and Mahindra were among the top losers from the Sensex30 pack. IT stocks were sharply hit after Accenture's results failed to impress the D-street. The Nifty IT index plunged over 570 points or 1.48%. Trent, BEL, Bajaj Finance, Kotak Bank and Bajaj Finserv were among the top gainers.
"Accenture reported $1.5 billion of generative AI bookings, up 7.1% quarter-on-quarter and 66.7% year-on-year. While the growth numbers are strong, the momentum has slowed down considerably. In conjunction with bookings, generative AI revenue growth is also decelerating sequentially," Kotak Institutional Equities stated in its report.
Technical Outlook
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.
Meanwhile, D-street's fear gauge, Nifty Vix, surged over 2.7% on Monday, signalling rising volatility levels. The Indian stock market has remained largely rangebound so far this month, struggling to find any directional trend.
On Monday, the index managed to close above the support level of 24,850. Analysts believe that Indian equities might 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," said De.
