The Sensex Index (INDEXBOM: SENSEX) went down for the second successive session on Friday after running into strong geopolitical headwinds. After losing by 1% in Thursday’s session, the index was down by 0.8% in the early afternoon trading and at 81,017 points, with investors spooked by news of Israel’s military strikes on Iran. Furthermore, tension is still high after Iran launched an estimated 100 drones towards Israel.
Crude oil prices spiked following Israel’s strike against Iran’s Revolutionary Guards Commanders and top nuclear scientists, with benchmark Brent crude up by 5.7% and West Texas Intermediate (WTI) going up by 8% at press time. Stocks of Indian oil marketing companies including IOC, HBCL and BPCL were down by between 0.8% and 1.6% in response to the developments in the Middle East.
With risk-off sentiment dominating global markets, investors are dumping equities, with the Sensex Index feeling the ripple effect. Looking ahead, that sentiment will likely see a shift towards safe haven assets like gold, treasury bonds and the US dollar. In addition India is still reeling from the impact of the devastating Air India crash that killed more than 240 people. That has brought downward pressure on airline stocks, with IndiGo share price down by 3.75% and SpiceJet losing by 1.75% at the time of writing.
Sensex Index
The Sensex Index pivots at 81,600 points and action below that level favours the sellers to be in control. The first support will likely be at 80,890 points, but a stronger momentum could break below that level and test the second support at 80,700 points.
On the other hand, action above 81,600 points will signal control by the buyers. In that case, the Index will likely rise further and encounter primary resistance at 81,780. Breaking above that level will invalidate the downside narrative. In addition, such momentum could send the Index higher to test 81,900 in extension.
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