Sensex and Nifty fell more than 1% due to worries about the situation in the Middle East and sluggish global trends

The benchmark Sensex and Nifty fell more than 1% on Monday, sending stock markets into a tailspin as investors were uneasy due to the growing tension in the Middle East and unimpressive trends in global markets.

The 30-share BSE Sensex fell 845.12 points, or 1.14 percent, to close at a low of 73,399.78, more than two weeks ago, continuing its losses from the previous session. It fell 929.74 points, or 1.25 percent, to 73,315.16 throughout the day.

The NSE Nifty ended at 22,272.50, down 246.90 points, or 1.1%.

Important indexes had fallen more than 1% during the previous session on Friday as a result of investors taking profits at all-time highs. Nifty fell 481 points, or 2.13 percent, to close in on the 22,300 mark for the second consecutive day, while Sensex shed 1,638 points, or 2.19 percent.

The markets were also negatively impacted by withdrawals of foreign funds and US inflation data that was higher than anticipated.

Proposed modifications to the tax treaty between Mauritius and India, the resurgent war in the Middle East, and the unexpectedly high rate of inflation in the US were seen by analysts as the main drags.

The biggest laggards in the Sensex basket were Tech Mahindra, Wipro, ICICI Bank, Bajaj Finserv, Bajaj Finance, Tata Motors, and Larsen & Toubro.

The winners were Bharti Airtel, Maruti, and Nestle.

In the Asian markets, Shanghai concluded in the positive area, while Seoul, Tokyo, and Hong Kong finished down. The state of the European markets was inconsistent. Wall Street had a sharp decline on Friday.

The indexes were negatively influenced by market mood due to geopolitical concerns and higher-than-expected US inflation. The mid- and small-cap indexes suffered the worst losses because of their high valuation and the anticipation that profits growth would moderate in Q4FY24.

However, since market players anticipated that diplomatic efforts would likely defuse tensions in the Middle East, oil prices crept down and the European market opened favorably, according to Vinod Nair, Head of Research at Geojit Financial Services.

The benchmark for world oil, Brent crude, fell 1.04 percent to USD 89.51 a barrel.

According to market statistics, foreign institutional investors (FIIs) offloaded stocks worth Rs 8,027 crore on Friday.

The 30-share BSE Sensex and the NSE Nifty fell as a result of the growing geopolitical unrest in West Asia. The increased tensions between Israel and Iran caused market indices to trade lower, which resulted in losses in all key industries. Notably, reductions were also seen in the larger small and midcap groups, according to Suman Bannerjee, CIO of Hedonova, a hedge fund.

According to official statistics issued on Monday, the price increases of vegetables, potatoes, onions, and crude oil caused wholesale inflation to slightly climb to 0.53 percent in March from 0.20 percent in February.

According to official figures issued on Friday, retail inflation inched closer to the Reserve Bank’s 4 percent goal in March, having dropped to a five-month low of 4.85 percent.

Based mostly on the mining industry’s strong performance, India’s industrial output growth increased to a four-month high of 5.7% in February 2024, according to official statistics issued on Friday.

The Income Tax agency said on Friday that the agency has not yet signed or notified the revised India-Mauritius protocol on double taxation avoidance agreement (DTAA).

On March 7, 2024, India and Mauritius signed a DTAA modification that included the principle purpose test (PPT), which limits tax evasion by guaranteeing that benefits under the treaty are only given for legitimate business purposes.