Dubai : The Indian stock market opened sharply lower on Thursday, with the BSE Sensex plunging over 800 points at the open, before recovering slightly to trade around 719 points down by 10:45 a.m. IST. Investor sentiment took a hit amid rising geopolitical tensions in the Middle East and the aftershock of a tragic Air India crash a day earlier.
The dual impact of higher expected oil import costs and negative sentiment around the Tata Group, which owns Air India, dominated early trade.
Tata Group Under Pressure
Shares of several Tata Group-listed entities saw declines following the crash of an Air India Boeing Dreamliner shortly after takeoff from Ahmedabad airport on June 12. While tragic, analysts suggest the dip in Tata Group stocks is broadly in line with wider market movements rather than a company-specific selloff.
“All Tata Group stocks are down, but they are not experiencing incident-specific drawdowns,” said Milan Vaishnav, founder of ChartWizard.ae. “They are reacting more to overall market sentiment than the Air India event alone.”
Oil Price Concerns Take Center Stage
With oil prices surging over 6% globally following Israel’s airstrikes on Iran, investors are growing increasingly concerned about the impact on India’s energy import bill, given the country’s heavy reliance on foreign crude.
“Oil marketing companies are trading lower,” Vaishnav noted. “Rising input costs and geopolitical risks are weighing on the sector.”
Market Resilience Emerging
Despite the initial plunge, domestic indices have shown signs of recovery.
The Nifty 50, which dropped significantly at the open, bounced back more than 150 points, staying within the key trading range of 24,500 to 25,100, established over the past month.
“Indian equities opened down but are showing much stronger relative performance compared to global peers,” Vaishnav added. “The resilience is noteworthy given the magnitude of global market weakness.”
Volatility and Sector Rotation
Market volatility surged early in the session, with the India VIX spiking 15% at the open. However, it eased to around an 8% gain later in the morning.
Meanwhile, investors rotated funds into defensive sectors such as:
- Pharma
- Information Technology
- Upstream energy stocks
“We’re seeing a flight to safety in quality defensive names as uncertainty looms globally,” said Vaishnav.
The evolving geopolitical situation in the Middle East, combined with a tragic aviation incident at home, has cast a shadow over India’s financial markets. However, early signs of resilience and sectoral shifts suggest that investors remain cautiously optimistic in the face of rising global risk.
