Sensex sees worst week since May 2020 due to Middle East conflict: Check the worst performing sectors, stocks

Sensex sees worst week since May 2020 due to Middle East conflict: Check the worst performing sectors, stocksAuto stocks plunged 10.6%, the biggest laggards, as fears the Middle East war could hit production and exports rattled investors

• Sensex posts worst weekly drop since May 2020, down 5.5 percent
• Auto stocks plunge 10.6 percent, biggest fall in six years
• Coal India gains 6 percent as early summer boosts demand

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Benchmark index Sensex slid 5.5% this week, its worst weekly drop since May 2020, as a raging war in the Middle East kept crude oil prices above $100 a barrel, stoking inflation and growth jitters for India.

The Nifty 50 has dropped 5.3% this week. All the 16 major sectors logged losses this week. The broader mid-caps and small-caps dropped 4.6% and 3.7%, respectively.

Auto stocks plunged 10.6%, the biggest laggards, as fears the Middle East war could hit production and exports rattled investors. It was their steepest weekly drop in six years.

Financials-focused Bank Nifty slumped 7% this week amid intensifying foreign investor outflows.

Bucking the trend, Coal India jumped 6% as an early summer raised prospects for higher coal demand.

Benchmark indices extended their decline on March 13, falling for the third consecutive session as weak global cues and persistent foreign fund outflows weighed on investor sentiment, with Brent crude stabilising near $100 amid the ongoing West Asia conflict leading to sharp decline in the market. At close, the Sensex fell 1,470.50 points or 1.93% to 74,563.92, while the Nifty declined 488.05 points or 2.06% to 23,151.10.

45 Nifty stocks gave negative returns this week and 24 of them fell 5-12%.

L&T, M&M, UltraTech Cement, Eicher Motors, Maruti Suzuki are top Nifty losers while Polycab, IDBI Bank, MRPL, Bharat Forge are amongst top midcap losers.

"India faces a material terms-of-trade shock from rising energy prices amid the ongoing Middle East conflict," as per Goldman Sachs.

Supply disruptions through the Strait of Hormuz are likely to hit sectors including automobiles, oil marketing, tourism, consumer durables, electronic manufacturing services, fertilisers and chemicals, and city gas distribution.

"The extent of earnings damage will be dependent on the duration of conflict. Going by evolving dynamics, around 200 bps drop in FY27 earnings growth projections of Indian companies is likely," said Dharmesh Kant, head of equity research at Cholamandalam Securities.

"With key support for Nifty on the downside to watch out for is placed around 22,700-22,400. The sharp decline has pushed daily oscillators into oversold territory, with the 14-period RSI below 30. A short-term pullback is possible, but there are no clear reversal signals yet. The index needs to start forming higher highs and higher lows on a sustained basis and close above last week high 24,303 to signal a pause or reversal in the downtrend," said Bajaj Broking.'

"We believe that as long as the market is trading below 23,400/75,000, a weak formation is likely to continue. On the downside, Nifty could continue its correction wave until 22,800/73,600. Further downward movement may also continue, potentially dragging the index to 22,600/73,000," said Amol Athawale, VP Technical Research, Kotak Securities.