Domestic indices the Sensex and the Nifty fell about a percent on April 15 morning as escalating tensions in West Asia kept investors' risk appetite subdued.
Given the sharp uptrend in recent weeks, analysts expect some consolidation for the next few days as India Inc. unveils their fourth-quarter financials and voting for the Lok Sabha begins later in the week.
The Sensex was down 731 points, or 0.9 percent, to 73,502, while Nifty 50 slipped 230 points or 1 percent to 22,289. Broader markets, too, bled as Nifty Midcap 100 and Nifty Smallcap 100 indices declined up to 3 percent.
Devarsh Vakil - Deputy Head, of Retail Research, HDFC Securities expects the Israel-Iran conflict, domestic and global economic macroeconomic data, crude oil prices, January-March quarter results for Q4FY24, general elections 2024, and global cues to keep investors on their toes and guide market direction this week.
Vakil forecasted Nifty to now head towards the next major supports of 22,303-22,142 in the coming sessions. "As the intermediate uptrend is intact, we expect any correction to halt at lower levels and the intermediate uptrend to resume," he added.
On the other hand, Anand James, Chief Market Strategist, at Geojit Financial Services believes that if Nifty does not close above 22,200 or falls further below 21,800, it could confirm the break of the bullish structure that had 23,200 in the horizon and line-up 20,300 instead.
India VIX, which measures near-term volatility jumped more than 7 percent to trade around 12.3.
All sectors drowned in the sea of red. Bank Nifty, Nifty FMCG, and Nifty Realty indices were the top sectoral laggards as they declined over a percent each within the first hour of trade.
The stock of IT behemoth Tata Consultancy Services (TCS) was keenly tracked by investors as it reported better-than-expected March quarter earnings. The company's consolidated revenue rose 3.5 percent year-on-year (YoY) in Q4FY24, while net profit was up 9.1 percent YoY.
Brokerages were largely positive on TCS as they expect digital transformation deals to trickle benefits over the medium term, however, they remain cautious in the near-term due to a weak discretionary demand environment.
Asia-Pacific markets on a slippery slope
Markets in Asia-Pacific were on a downtrend this morning as investors weighed the impact of Iran's attack on Israel over the weekend. Iran launched more than 300 missiles and drones against military targets in Israel.
Japan's Nikkei 225 fell 1 percent, while Australia's S&P 200 index slipped 0.6 percent, and South Korea's Kospi slid over 1 percent.
On the commodity front, oil prices were little changed, with Brent Crude above $90 per barrel and WTI Crude above $85 per barrel.
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