Mumbai, January 6: The Indian markets witnessed a crashed by 2 per cent each amidst the geopolitical tensions US-Iran and spike in global oil prices. The S&P BSE Sensex on January 6, 2020, crashed 764.38 points to 40,613.96 during the intraday, while NSE Nifty 50 fell to 11,974.20 down 196.40 points. The index Sensex closed at 40,676.63 down by 787.98 points or 1.90 per cent, whereas on the NSE, the Nifty50 index ended at 11,993.05 down by 233.60 points or 1.91 per cent.
“Market sentiments have turned negative with rising fear of oil supply disruption after US President Donald Trump threatened sanctions on Iraq, the second-largest producer among the OPEC, after Iraq's parliament, voted in favor of expelling the US and foreign troops. Trump also threatened to retaliate against Iran after the country vowed to avenge the killing of its top commander,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services. Further, the broader market indices too faced heat as the BSE Midcap was down by 2.4 per cent and Smallcap indices fell 1.96 per cent. Bank Nifty was down by 898 points, the biggest fall in one day since August 2015. The indices that were top losers were Auto, Banking, and metals.
“We maintain a cautious stance on the markets in the near term. On the domestic front, Q3 earnings and macro data like Index of Industrial Prodcution(IIP) (scheduled this week) may provide further direction to the markets. However, volatility on the global front particularly any further escalation of US-Iran issue could keep the investors on edge. We would advise investors to avoid risky trades, as volatility is likely to remain high,” said Ajit Mishra, VP - Research, Religare Broking. Many market experts opined that such correction should be looked as a buying opportunity from a long-term perspective.