SENSEX drops nearly 1,000 points, NIFTY50 below 24,850; here are key factors dragging markets

The Indian equity benchmarks extended losses in afternoon trading and were on track to snap their six-day winning streak on Thursday, June 12, as investors turned to profit booking. The SENSEX fell as much as 992 points and NIFTY50 index dropped below its important psychological level of 24,850 dragged down by weakness index heavyweights like Larsen & Toubro, HDC Bank, Reliance Industries, Infosys, ICICI Bank and Mahindra & Mahindra.

As of 2:29 pm, the SENSEX fell 909 points to 81,608 and NIFTY50 index declined 281 points to 24,862.

Weak global markets and rising geopolitical tensions

The sharp fall in Indian markets came on the back of weak global cues amid reports of rising geopolitical tensions between Iran and Israel. According to a report by Washington Post United States is on high alert amid rising fears of a potential Israeli strike on Iran. The Trump administration fears that Israel may choose to strike Iran's nuclear facilities without the consent of the United States.

Meanwhile, a New York Times reported that Iranian military and government officials have already met to discuss their response to a potential strike by Israel.

Following these developments, global equity markets were trading with deep cuts Hong Kong's Hang Seng declined 1.42% and Japan's Nikkei dropped 0.68%.

European markets were also trading lower as Germany's DAX fell 1.43%, England's FTSE100 dropped 0.1% and French CAC40 index declined 0.82%.

US stock futures were also hinting at weak session in the US as Dow Futures fell 0.5% or 214 points to 42,639.

Surge in crude prices

Sharp up move in crude prices following rising geopolitical tensions between Iran and Israel also negatively impacted the sentiment on Dalal Street as India imports most of its crude oil requirements and rising crude prices do not augur well for Indian economy.

Heavyweights drag

Index heavyweights like Larsen & Toubro, HDC Bank, Reliance Industries, Infosys, ICICI Bank and Mahindra & Mahindra were among the top drags on the SENSEX. They collectively wiped out 400 points from the SENSEX.

Sectoral indices and broader markets underperform

Selling pressure was broad-based as all the major sector gauges compiled by the National Stock Exchange were trading lower led by the NIFTY Realty index's 2% fall. Nifty Consumer Durables, Metal, PSU Bank, Metal, FMCG, Auto and Financial Services indices also fell between 1%-1.7%.

Broader markets were also facing selling pressure as NIFTY Midcap 100 index fell 1.45% and NIFTY Smallcap 100 index dropped 1.65%.

NIFTY50 top gainers and losers

As many as 43 shares in the NIFTY50 index were trading lower. Tata Motors was top loser in the NIFTY50 index, the stock fell 3.12% to close at ₹713. Tata Steel, Larsen & Toubro, Coal India, Titan, Shriram Finance, Jio Financial Services and Trent also fell between 2%-2.6%.

On the flipside, Bajaj Finserv, Apollo Hospitals, ONGC, Asian Paints and Wipro were among the notable gainers.

The overall market breadth was negative as 2,722 shares were declining while 1,225 were advancing on the BSE.