Sensex falls over 1700 points as tensions in Middle East escalate

New Delhi [India], October 3 (ANI): Indian stock benchmarks took a sharp hit on Thursday, continuing its losses for fourth straight session.
But the extent of decline in the indices today was substantive, attributable to escalated tensions in the Middle East after the latest attack on Israel by Iran.
Sensex ended the day at 82,497.10 points, down 1,769.19 points or 2.10 per cent, while Nifty ended at 25,250.10 points, down 546.80 points, or 2.12 per cent. Among the sectoral indices, all declined but realty, oil and gas, bank, auto, and media were the top losers.
"The domestic market took a sharp downturn following Iran's launch of ballistic missiles at Israel, sparking fears of retaliation and escalation in war. This could potentially drive-up oil prices and lead to inflationary pressures," said Vinod Nair, Head of Research, Geojit Financial Services.
"Additionally, new SEBI regulations for the F&O segment have raised concerns about reduced trading volumes in the broader market. Lastly, with attractive valuations in China, FIIs have redirected their funds, adding pressure on Indian stocks," said Nair.
As retail investors are increasingly incurring losses in equity index derivatives (F&O) trade, SEBI on Tuesday put in place as many as six measures to strengthen the derivatives framework, including raising minimum contract size. The announced measures will be made effective in phases starting November 20.
Chinese economic stimulus leading to buying by FIIs, geopolitical risks, tightening F&O trade rules, are some of the key reasons behind the fall in markets lately, said Ajay Bagga, a veteran financial market expert.
On Monday, Sensex fell over 1,000 points.
Prior to the latest slump, the US Federal Reserve's monetary policy committee loosening interest rate by steep 50 basis points, in particular, had been lending fresh support to Indian stocks. The steeper the rate cut in the US, the more the tendency to flight of capital to alternative investment destinations, including India.
Continued buying by foreign portfolio investors (FPIs) also somewhat supported the stock indices. Foreign portfolio investments in the Indian stock market remained positive for the fourth consecutive month through September. (ANI)