Sensex Drops 295 Points, Nifty Slips Below 24,350 Amid Iran-US Tensions

Stock Market Today: Sensex, Nifty Slide as West Asia Tensions Weigh on Sentiment

Domestic equity markets opened lower on Monday, August 17, as renewed geopolitical concerns in West Asia and cautious global cues weighed on investor sentiment. Selling pressure was visible across several key sectors, though auto, healthcare, pharma and metal stocks managed to hold gains.

At 9:21 am, the BSE Sensex was trading at 77,713.87, down 295.38 points, or 0.38%, from its previous close of 78,009.25. The NSE Nifty stood at 24,305.95, lower by 60.05 points, or 0.25%.

IT, PSU Banks Lead Declines

The broader market remained mixed in early trade. Nifty IT fell 0.68%, while Nifty PSU Bank declined 0.90%. Nifty Financial Services dropped 0.41%, FMCG slipped 0.55% and Nifty Financial Services Ex-Bank was down 0.74%.

In contrast, Nifty Auto advanced 0.41% and Nifty Media gained 0.46%. Nifty Healthcare and Nifty Pharma rose 0.24% and 0.22%, respectively, while Nifty Metal edged up 0.08%.

Among Sensex stocks, Hindustan Unilever, Bajaj Finserv, UltraTech Cement, SBI, Larsen & Toubro and Infosys were among the biggest drags, declining as much as 1.3%. Eternal, BEL, Axis Bank and Mahindra & Mahindra were among the gainers, rising up to 0.6%.

Why Are Markets Falling?

Investor sentiment remained subdued amid persistent geopolitical tensions in West Asia. Concerns over potential disruptions to shipping through the Strait of Hormuz, along with elevated crude oil prices, have increased worries about inflation, corporate margins and global growth.

Ponmudi R, CEO of Enrich Money, said Indian equities could remain range-bound with a cautious bias as geopolitical uncertainty continues to limit risk appetite. He pointed to regional shipping disruptions, Iran’s position on the Strait of Hormuz and renewed Israeli strikes in Lebanon as factors raising concerns about a prolonged disruption to global energy and trade routes.

Crude prices remain a key factor for Indian markets. Brent crude was trading around $88.50 a barrel, while US West Texas Intermediate crude was near $82.12. Oil prices had recorded strong gains last week amid uncertainty surrounding the Iran conflict and the Strait of Hormuz.

For India, a sustained rise in crude prices is a concern because of the country’s dependence on oil imports. Higher energy costs can add pressure on inflation, the rupee and corporate profitability.

Asian Markets Mixed

Asian equities were largely subdued on Monday as investors assessed geopolitical developments and the global interest-rate outlook. MSCI’s broadest index of Asia-Pacific shares outside Japan was broadly flat, while Japan’s Nikkei gained around 0.4%. Australia’s resources-heavy index declined nearly 0.3%.

Investors are also awaiting China’s July economic data and several US economic indicators due later this week. S&P 500 futures were up around 0.1%, while Nasdaq futures gained about 0.2%, following record closes on Wall Street last week.

Fed Minutes in Focus

The minutes of the Federal Reserve’s July meeting, due Wednesday, are expected to be a major trigger for global markets. Investors will closely examine the discussion for clues about differences among policymakers and the outlook for a possible rate cut in September.

Ponmudi said the minutes could provide greater clarity on the policy divide within the FOMC and the Fed’s September outlook. Any change in expectations around US interest rates could influence Treasury yields, the dollar and foreign capital flows into emerging markets such as India.

Nifty May Remain Range-Bound

V K Vijayakumar, Chief Investment Strategist at Geojit Investments, expects the Nifty to remain within the 24,000-24,600 range in the near term until a fresh trigger emerges.

According to him, crude prices around $89 and the absence of an immediate resolution to the geopolitical crisis could restrict any sustained market rally. Weakness in major IT and banking stocks is also weighing on the index.

However, Vijayakumar sees opportunities beyond the Nifty 50, particularly in the mid- and small-cap segments. He noted that broader-market stocks significantly outperformed during the Q1 results season and believes this trend could continue.

He also highlighted improving performance in pharma, particularly across CDMO, hospital and diagnostics companies, while discretionary consumption has been outperforming traditional FMCG stocks. Mid-cap IT has also shown stronger performance than large-cap IT.

Nifty Technical Levels

Ponmudi said the near-term technical setup for the Nifty remains cautious, with selling pressure emerging at higher levels.

The 24,500-24,600 zone remains an important resistance area. A sustained breakout above 24,600 could improve sentiment and push the index towards 24,800-25,000.

On the downside, 24,250-24,300 is the immediate support zone. If the Nifty holds this range, the index could continue trading within its broader range. However, a decisive break below 24,250 may intensify selling pressure and drag the index towards the 24,000 mark.

Overall, the near-term outlook remains cautious, with crude oil prices, West Asia developments, global economic data and the upcoming Fed minutes likely to determine the market’s direction.