Stock Market: Israel attack tanks bourses; China factor serves double jolt

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By S Jha

New Delhi, October 9: Indices, predictably, tanked on Monday following Hamas attack on Israel, which has left over 1200 people dead in both the sides of Israeli border with Gaza. Nifty went down by over 140 points, as all the sectors ended in the red. The bearish sentiment gained firmness on the back of the crude oil spiking by over four per cent on Monday morning, with Dow Futures also tanking by more than 200 points.

The market is fearing the prospects of a regional war like situation in the middle east as Israel has vowed revenge on Hamas. However, Dow Jones in the early hour of trade is just marginally lower, assessing the import of the Hamas attack on Israel. With the US military assets moving to the Mediterranean Sea, there is a likelihood that the prospects of a regional war may just be farfetched.

The Indian bourses have been in the grip of bears since September also because of the foreign fund houses selling Indian equities as they adjust with their portfolio amid rising bond yields, as well as the pull of the Chinese equities. Report say that there is a strong demand for oil from China as well following Beijing aggressively seeking to pump prime the economy. With funds shifting bases to China, the Indian equities have to bear the twin jolts.

Yet, IT majors such as HCL Technology, TCS, and Tech Mahindra on Monday sought to defy the bearish trend as they gained ahead of the beginning of the earning season. The FIIs sold net of about Rs 990 crores, but their domestic counterparts bought aggressively with a net of Rs 2661 crores, making a positive contribution on the overall institutional fronts. The DIIs remain on the path to ‘buy in panic and sell in euphoria’.

Advance decline ratio also favoured sell on Monday. The market is likely to remain volatile as Israel attack remains a developing story with regular flow of updates.