Market fall on latest US-IR

Indian shares fell on Friday as renewed hostilities between Iran and the US muddied the outlook for a near-term resolution to the conflict. Foreign portfolio investors were net sellers of shares worth ₹4,111 crore, while domestic institutions bought shares worth ₹6,748 crore.

The benchmark Sensex ended the session down 516 points or 0.7 per cent at 77,328. At the same time, Nifty 50 closed at 24,176.15 with a fall of 151.50 points or 0.6 percent. Friday’s decline erased weekly gains for the benchmark indices. During the week, the Sensex rose 0.5 per cent, while the Nifty rose 0.7 per cent. The total market capitalization of BSE-listed firms declined by ₹1.5 trillion to ₹473.5 trillion.

After touching $100 per barrel (bbl) during the day, Brent crude oil price was trading at $99.86/bbl. Iran and the United States clashed near the Strait of Hormuz overnight, reports have revealed. The latest tensions threaten the fragile ceasefire that has been in place for a month. Both sides have not been able to reach any permanent agreement to end the war.

Reports suggested the US attacked missile and drone launch sites in Iran, claiming they were responsible for attacks on US warships passing through the strait. Earlier, Iran had said the US had targeted two of its oil tankers and accused Washington of attacking civilian areas off its southern coast with the cooperation of some regional countries.

Benchmark indices closed higher in the past two weeks on peace deal hopes and the absence of negative surprises in March-quarter earnings. However, the latest clashes have dashed those hopes.

Vinod Nair, Head of Research, Geojit Investments said, “Markets witnessed a risky session after the latest US-Iran military action near the Strait of Hormuz… Crude oil prices being stable around $100 per barrel and soft US 10-year yields are supporting the broader sentiment and the rupee.”

The market breadth was weak, with 2,217 shares falling and 2,020 rising.