Sensex down by 300 points, Israel’s return attack fears grip markets

BSE Sensex is down by more than 300 points on Tuesday after a plunge of 845 points on Monday, continuing the declining trend amid concerns about general elections, geopolitical factors, and uncertainty in the markets.

Sensex is trading at 73,040 points, down by 358 points. Sensex is on the verge of falling below the 73K mark if the weakness persists. IT and financials are trading weak with Infosys, Bajaj Finserv, Indusind Bank, Ultratech Cement, L&T down more than 1 per cent.

Analysts expect economic and geopolitical issues to continue to weigh on markets in the near term. The economic factor is the rising US bond yields which reduces the prospects of rate cuts by the Fed this year. High bond yields are negative for risky assets like equity and will accelerate FII selling in emerging markets like India, they said.

Essentially the market is more concerned about the geopolitical issue.

Israel military chief vowed that “there will be a response to Iran’s attack on Israel” and it has increased the probability of escalation of tensions in the Middle East, evolving into a bigger scale.

As investors seek to wait and watch the developments. high quality large-caps are on corrections to make them fair. Large-caps in banking, IT, autos, capital goods, oil & gas and cement are advised as ideal for long-term investment, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said.