SENSEX crashes over 1,300 points, NIFTY50 drops below 24,600; here are factors behind market fall

The Indian equity benchmarks nosedived on Friday, June 13, with SENSEX falling as much as 1,337 points and NIFTY50 index touching an intraday low of 24,473 on the back of weak global cues amid rising geopolitical tensions after Israel attacked Iran. As of 9:23 am, the SENSEX was down 924 points at 80,767 and NIFTY50 index dropped 280 points to 24,607.

Israel attacks Iran and global markets plunge

Equity markets across the world slumped and crude oil and gold prices surged after geopolitical tensions escalated after Israel attacked Iran's capital Tehran. Israel said it targeted nuclear and military sites. The attack comes as tensions have reached new heights over Tehran’s rapidly advancing nuclear programme, news agency AP reported.

Israeli Prime Minister Benjamin Netanyahu said that Israel targeted Iran’s main enrichment facility in Natanz and the country’s ballistic missile program, as well as top nuclear scientists and officials.

The report from Iranian state television offered few other details about what happened to Gen. Hossein Salami. Iran’s Revolutionary Guard, created after its 1979 Islamic Revolution, is one of the main power centres within the country’s theocracy.

Japan's Nikkei fell 1.12%, South Korea's KOSPI dropped 1%, China's Shanghai Composite declined 0.73% and Hong Kong's Hang Seng tumbled 0.68%.

Rising crude and gold prices

Amid rising geopolitical tensions in west Asia following Israel's attack on Iran, Brent Crude oil futures surged 10% to hit an intraday high of $76.14 per barrel.

Rising crude oil prices are negative for Indian economy as India imports most of its crude requirement.

Gold, which is considered as a safe haven investment in times of crises, surged over ₹1 lakh per 10 grams on the MCX indicating a shift of money from risk assets like equities to safety of gold.

Selling pressure grips all sectors, India VIX spikes 9%

Selling pressure was visible across sectors on Friday as all the sector gauges compiled by the National Stock Exchange were trading lower led by NIFTY Oil & Gas index's 1.3% fall. Crude oil related shares like HPCL, Asian Paints, Indian Oil, BPCL and others were trading lower after crude prices spiked in international markets.

NIFTY Bank, Financial Services, PSU Bank, FMCG, Auto and Realty indices were also trading lower by over 1%.

India VIX, the measure of fear on the street, spiked by over 9% to 15.98 indicating heightened volatility.

Broader markets underperform

Mid- and small-cap shares were also facing selling pressure as NIFTY Midcap 100 index declined 0.98% and NIFTY Smallcap 100 index fell 1%.

Selling pressure in NIFTY Midcap 100 index was so intense that 95 stocks were trading lower led by IREDA's 4% fall.

In the NIFTY Smallcap 100 index 92 stocks were trading with a negative bias.

NIFTY50 top gainers and losers

48 shares in the NIFTY50 index were trading lower. Trent was top loser in the NIFTY50 index, the stock fell 2% to ₹5,515. Kotak Mahindra Bank, Adani Ports, Power Grid, Adani Enterprises and Ultratech Cement were also among the losers.

On the flipside, ONGC and Bharat Electronics were among the notable gainers.

The overall market breadth was extremely bearish as 2,547 shares were declining while 592 were advancing on the BSE.