A recovery in Brent crude oil prices, a US President Donald Trump’s social media post, Israeli attack on Lebanon, weakness in banking names, persistent foreign outflows and profit booking ahead of the kick start of earnings season, dragged stock market benchmarks Sensex and Nifty lower on Thursday. The day will see IT bellwether Tata Consultancy Services Ltd (TCS) kicking off the results season.
Kotak Institutional Equities expects March quarter net profit for BSE-30 constituents to increase 3.1 per cent year-on-year (YoY). It expects Nifty50 firms to deliver a mere 2.6 per cent earnings growth.
After falling about 1 per cent, the BSE Sensex was quoting at 76,953.90, down 609 points or 0.79 per cent by 10.30 am. Nifty stood at 23,855.65, down 141.70 points or 0.59 per cent. Both the indices snapped a five-day rally, partly on profit-taking after the US-Iran temporary ceasefire. private lenders HDFC Bank Ltd and ICICI Bank together contributed 250 points negatively to the Sensex levels.
Trump in Truth Social post said US ships, aircraft, and military personnel, with additional ammunition and weaponry “that is appropriate and necessary for the lethal prosecution and destruction of an already substantially degraded enemy” will remain in place in, and around, Iran.
This is until what he called “REAL AGREEMENT” reached is fully complied with.
“If for any reason it is not, which is highly unlikely, then the “Shootin’ Starts,” bigger, and better, and stronger than anyone has ever seen before,” Trump said.
There are also concerns surrounding Israeli attack on Lebanon and its fallout on the ceasefire, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
“If crude again spikes in response to this development, the uptrend witnessed yesterday will be at risk of losing stream. The big takeaway from the rally in the market yesterday is that fairly valued stocks depressed by FPI selling and shorting will bounce back at anytime. Patience is the key,” he said.
Nomura in an ex-Japan strategy note said uncertainty remains elevated in the near term, but stocks can still deliver modest returns by end-2026.
“Recommend investors maintain balanced portfolios given binary risks. The near-term outlook remains highly uncertain with headlines oscillating between severe escalation, de-escalation and even this announcement of a temporary two-week US-Iran ceasefire,” it said.
It noted that traffic flows from the Strait of Hormuz (SoH), according to Bloomberg complied data, show a very slight pickup over the past few days, but remain significantly below normal levels. Many questions remain about whether a sustainable truce is long-lasting, it said.
“And it is conceivable that headline volatility will not completely disappear despite this cease-fire,” it added.
Brent crude for June delivery, which had fallen to a low of $90.40, has seen some recovery. It last stood at $97.47 a barrel, up 2.86 per cent over its previous close.
There is, however, no sign of easing in foreign outflows. Provisional data showed, even on a strong rally day on April 8, foreign portfolio investors sold a net Rs 2,811.97 crore in domestic equities.
“Overall, markets are responding positively to the recent decline in crude prices, but the absence of strong follow-through buying points to a measured approach. This does not yet reflect a full risk-on shift, but rather a relief-driven recovery tempered by underlying caution,” said Ponmudi R, CEO of Enrich Money.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
