Small-cap stocks are facing greater valuation pressure due to geopolitical concerns. More than half of these smaller companies trade below their three-year average valuations. Technical indicators also suggest small-caps are entering oversold territory faster. This trend persists across longer timeframes, indicating significant price exhaustion in the small-cap segment.
Foreign investors have withdrawn a record 89,916 crore from Indian stocks. This outflow over 15 sessions is the largest in two decades. Domestic mutual funds bought 71,183 crore to support the market. Previous heavy selling by foreign investors was also cushioned by domestic fund purchases.
Indian markets experienced a significant downturn on Thursday. This sell-off erased recent gains, driven by global concerns and geopolitical issues. Several major companies like HDFC Bank, ICICI Bank, and NTPC are in focus today due to specific news. Investors are watching these developments closely as the market navigates current challenges.
Metal prices experienced a sharp decline on Thursday. Aluminium saw a significant drop as speculators exited bullish positions. Copper also sank to a three-month low. Surging oil prices are raising concerns about global economic growth. Additionally, ample inventories are weighing on the market. This situation has led to a broad sell-off across various metals.
Oil prices saw sharp swings as Iran attacked energy targets. The US is boosting supply to counter rising costs before November elections. Brent crude rose, while US crude futures briefly turned negative. Attacks hit gas fields and refineries in the Middle East. European gas prices surged. The US may ease sanctions on Iranian oil.
Global investors remain hesitant to abandon stocks and bonds despite recent energy shocks and inflation concerns. Historical resilience to oil disruptions and strong pre-existing themes like AI and growth offer some support. However, the duration of the Iran conflict and its impact on inflation and interest rates remain critical uncertainties for financial markets.
Nearly 28 million outbound trips from the Middle East are at risk this year as a result of the disruption caused by the war launched by the United States and Israel on Iran, according to a research note from Oxford Economics.
Investors reassessing the potential economic fallout from the war in Iran are selling assets across the globe, from government bonds to stocks and gold, reigniting fears that markets may become vulnerable to a bigger dislocation.
Markets slumped on soaring crude and a hawkish Federal Reserve, as movers like HDFC Bank, Adani Total Gas, Infosys and sector-wide selling in autos and IT shaped a turbulent trading day.
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