Shares fall as Iran-Israel tensions spook investors EXPORTER STOCKS FALL AS GLOBAL ISSUES SPARK COST CONCERNS
NSE Nifty 50 fell 1.1%, while the S&P BSE Sensex lost 1.14% on fears of rising conflict
BENGALURU: Indian shares declined on Monday as investors turned risk-averse after Iran’s retaliatory attack on Israel over the weekend spurred fears of a wider regional conflict.
The NSE Nifty 50 fell 1.1% to 22,272.50, while the S&P BSE Sensex lost 1.14% to 73,399.78, at close.
“The escalation in the Iran-Israel conflict is a serious development and Indian markets will be under pressure over the next few sessions,” said Samir Bahl, chief executive of investment banking at Anand Rathi Advisors.
The worries in the Middle East have forced investors to look for safer places for their money, according to three analysts. Both benchmarks dropped about 1% each for two sessions in a row.
“Hotter-than-expected U.S. inflation data last week and rising geopolitical worries have kept global markets on tenterhooks,” said Devarsh Vakil, deputy head of retail research at HDFC Securities.
Other Asian peers also traded lower, with the MSCI Asia ex-Japan index shedding 0.9%.
Forty-four of the Nifty 50 stocks and twelve of the 13 major sectors logged losses.
Oil and Natural Gas Corporation jumped 5.33% after Jefferies initiated coverage of the Indian oil explorer and set a Street-high price target.
Aluminium producer Hindalco Industries gained 2.35%, tracking the rise in global aluminium prices after the U.S. and UK imposed restrictions on the trading of new Russian commodities in exchanges.
ONGC and Hindalco were the top two Nifty 50 gainers.
Battery maker Exide Industries climbed 2.67% to a record high after Morgan Stanley raised the price target to a Street-high of ₹485, citing gains from the government’s push for making electric vehicles in India.
Small- and mid-caps lost 1.73% and 1.57%, respectively, after outperforming the benchmarks so far in April.
Shares of Indian firms that export rice and tea to the Middle East slumped amid concerns that geopolitical tensions may create logistical headwinds and add cost burden.
Investors worry that Iran’s attack on Israel would lead to supply chain disruptions and raise delivery and reinsurance costs for producers in the South Asian country. Iran is a major buyer of India’s basmati rice.
Rice producers Kohinoor Foods Ltd. and Chaman Lal Setia Exports Ltd. fell as much as 8.3% and 13%, respectively, before paring the declines. Tea manufacturers including Jayshree Tea & Industries Ltd. and Goodricke Group Ltd. also dropped.
India’s export of basmati rice rose 35% for 2022-23 compared to the previous period, according to government data.
NEW DELHI: U.S. electric carmaker Tesla is looking at potential showroom locations in New Delhi and Mumbai ahead of plans to begin sales in India later this year, two people familiar with the discussions said.
Tesla, which saw its global vehicle deliveries decline in the first quarter for the first time in nearly four years, is stepping up efforts to expand into new markets.
It wants to begin with a showroom of 3,000 to 5,000 square feet (280-465 square metres) as well as a service hub in each city, said one of the people familiar with the plans.
The automaker has begun production of right-hand drive cars at its plant in Germany for export to India, separate sources have said.
India last month cut electric vehicle import taxes to 15% from as much as 100% for automakers that invest at least $500 million and set up a factory.
Tesla chief executive Elon Musk is expected to make an investment announcement and meet Prime Minister Narendra Modi during a two-day visit to India from Sunday. Musk and Modi last met in New York in June.
Tesla executives started looking at locations last month and have held talks with several real estate developers as they look at potential high street and mall sites, one of the sources said. The person added that the company is keen to begin construction soon so that the showrooms can open in 2024.
The sources declined to be identified as discussions were confidential. Tesla did not immediately respond to a request for comment.
Tesla is grappling with slower growth for electric vehicles in both its main markets of the United States and China. Reuters reported this month that Tesla has cancelled a longpromised inexpensive car that investors have been counting on to drive mass market growth.
Demand for electric cars in India - the world’s third-largest auto market - is expected to rapidly climb. EVs made up just 2% of India’s total car sales in 2023, but the government has said it wants 30% of all new car sales to be electric from 2030.