Mumbai, April 16 (IANS) – The BSE Sensex is facing a significant dip of over 300 points on Tuesday amid ongoing geopolitical tensions, with the index currently at 73,040 points and down by 358 points. The market is apprehensive about the possibility of Sensex falling below the crucial 73K mark if the trend continues.
IT and financial sectors are witnessing a downtrend, with major players like Infosys, Bajaj Finserv, Indusind Bank, Ultratech Cement, and L&T experiencing a decline of more than 1 per cent. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that economic and geopolitical concerns are likely to exert pressure on the markets in the short run.
According to Vijayakumar, the rise in US bond yields poses a threat as it diminishes the likelihood of rate cuts by the Federal Reserve this year. The surge in bond yields has a negative impact on high-risk assets such as equities, potentially leading to an increase in Foreign Institutional Investor (FII) selling in emerging markets like India.
Elaborating on the geopolitical aspect, Vijayakumar pointed out, “The market is more concerned about the geopolitical issue. Israel military chief’s statement that ‘there will be a response to Iran’s attack on Israel’ has increased the probability of escalation of tensions in the Middle East. This is likely to keep the markets weak in the near-term.”
In light of the current market scenario, investors are advised to closely monitor developments while considering accumulating high-quality large-cap stocks on corrections. Vijayakumar suggested that corrections in the market will make valuations of large-caps more reasonable, particularly in sectors like banking, IT, autos, capital goods, oil & gas, and cement. Additionally, with metal prices showing stability, metal stocks are expected to exhibit resilience in the market.
