Market ends lower as US-Iran tensions weigh on sentiment

The Indian market felt the heat of rising tensions between the US and Iran which pushed prices of safe-haven assets higher and dragged riskier equities lower on January 3.

Major markets across the globe declined, global crude oil prices rose about 4 percent and gold and other safe-haven assets jumped as the US killing of a top Iranian commander in an airstrike in Iraq stoked tensions in West Asia.

The rupee suffered a loss of 40 paise in intraday trade due to the spike in crude prices.

The BSE Sensex ended 162 points, or 0.39 percent, down at 41,464.61, while the NSE benchmark Nifty settled with a loss of 56 points, or 0.45 percent, at 12,226.65.

The BSE Midcap closed 0.45 percent lower but the Smallcap index closed flat.

“Investors turned cautious as tensions emerge in West Asia. Crude oil prices rose, while the strong dollar held IT and pharma stocks higher. With market testing new highs, the emergence of geopolitical tensions could force people to book some profits. Crude prices could turn volatile due to risk of possible retaliation from Iran, which could impact the performance in the short-term,” said Vinod Nair, Head of Research at Geojit Financial Services.

For the week, the Sensex and the Nifty slipped by 0.3 percent and 0.2 percent, respectively.

Top Nifty gainers: TCS, Sun Pharma, GAIL

Top Nifty losers: Zee Entertainment, Bharti Infratel, Asian Paints

Sectors & stocks:

Barring BSE IT (up 1.52 percent), Teck (up 1.12 percent) and Healthcare (up 0.46 percent), all sectoral indices ended with losses. BSE Auto, Bankex and Power fell over a percent, emerging as the top losers among the sectoral indices.

Volume spike of 200-900% was seen in IndiGo, NIIT Tech, Torrent Pharmaceuticals, ONGC and BPCL.

Long Buildup – GMR Infra, NIIT Tech, Max Financial Services, IndiGo and Biocon

Short Buildup – Zee Entertainment, Apollo Tyres, Canara Bank, Bank of Baroda and Bharti Infratel

Stocks in news

IT, pharma gain: A depleted rupee pushed IT and pharma stocks higher in an otherwise weak market. IT, tech and healthcare indices logged gains on the BSE, while all others fell.

OMC stocks fall: Stocks of oil and gas companies ended lower as global oil prices hit three-month high following the US airstrike, raising concerns that escalating tensions could disrupt supplies. HPCL ended 2 percent lower, while BPCL shed over a percent.

IIFL Securities: IIFL Securities share price jumped almost 5 percent as Rakesh Jhunjhunwala bought a stake in the stocks through a bulk deal. Jhunjhunwala’s RARE Enterprises bought 27,84,879 shares of IIFL Securities through a bulk deal on BSE on January 2, data available with the exchange showed.

Cords Cable: Cords Cable Industries share price surged 8 percent after the company received approval from a Japanese engineering consultancy and contracting major for supplies.

Alps Industries: Alps Industries share price declined nearly 5 percent as the company defaulted on interest as well as the principal loan amount. The default amount of Rs 719.38 crore includes Rs 713.85 crore to Edelweiss Assets Reconstruction Company and Rs 5.53 crore to HDFC Bank. The payment was due January 1, 2020.

InterGlobe Aviation: InterGlobe Aviation (IndiGo) gained 2 percent after it said a meeting of shareholders will be convened on January 29 to seek approval for changes in the company’s articles of association.

Technical view

After a sharp upside bounce in the previous session, the Nifty failed to show follow-through upmove on January 3 and closed the day lower. A small negative candle formed on the daily chart with a gap down opening.

The Nifty was near its all-time high of 12,293 on January 2. On January 3, however, the index fell from the upper end of the consolidation zone. The index closed negative for the second consecutive week.

“On the lower time-frame, the sideways action has taken the form of a triangular pattern. On the higher side, the index needs to surpass the level 12,300 on a closing basis to resume the rally. On the downside, 12,200-12,150 will be the key support zone to watch out for. Failure to hold on to the supports would mean deeper dive is in the offing,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan by BNP Paribas.

Three levels: 12,192 | 12,265 | 12,294

Max Call OI: 12,500 | 12,200

Max Put OI: 12,000 | 12,200

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