Middle East Tensions Plunge Indian Stock Markets

Indian stock benchmarks witnessed significant losses for the fourth consecutive session as Middle East tensions escalated. The latest attack on Israel by Iran fueled fears of market instability, causing substantial declines in Sensex and Nifty indices. Changes in SEBI regulations and foreign investment trends also influenced the market downturn.

Indian stock markets suffered a substantial blow on Thursday, marking the fourth straight session of losses, as geopolitical tensions in the Middle East surged following Iran's attack on Israel.

The BSE Sensex closed at 82,497.10, plummeting 1,769.19 points, or 2.10%. Meanwhile, the Nifty dipped to 25,250.10, down 546.80 points, or 2.12%. Sectoral indices, notably realty, oil and gas, banking, auto, and media, were among the top decliners. "The sharp downturn in the domestic market was triggered by Iran's ballistic missile attack on Israel, heightening fears of retaliation and ongoing conflict, which could drive oil prices higher and add inflationary pressures," said Vinod Nair, Head of Research at Geojit Financial Services.

Compounding the market challenges, recent SEBI regulations targeting the futures and options (F&O) segment have raised concerns about reduced trading volumes, putting further pressure on Indian stocks. These regulations, aimed at curbing losses in equity index derivatives, will be implemented in stages starting November 20. Additionally, China's attractive valuations have drawn foreign institutional investors (FIIs) away from the Indian market, Nair added.

Ajay Bagga, a seasoned financial market expert, noted that Chinese economic stimulus, geopolitical uncertainties, and tightened F&O trading rules have contributed to the recent market rout, echoing the more than 1,000-point drop in the Sensex recorded on Monday.

Prior to this slump, the Indian markets were buoyed by the US Federal Reserve's decision to cut interest rates by 50 basis points, enhancing the attractiveness of Indian stocks amidst continued buying by foreign portfolio investors (FPIs) through September, marking a four-month positive streak in foreign investments. (ANI)

(With inputs from agencies.)