The Indian equity market showed resilience on April 13, recovering from early losses to close with modest declines as geopolitical tensions continued to weigh on sentiment. The Nifty closed at 23,842.65, down 207.95 points or 0.86%, while the Sensex ended at 76,847.57, declining 702.68 points or 0.91%. According to Moneycontrol, the market witnessed a volatile session with the Nifty dipping to an intraday low of 23,555 before recovering to close around 23,830, indicating buying interest emerging near support levels. The recovery from lower levels suggests that downside is being absorbed, keeping the broader structure intact despite ongoing global uncertainties.
Silver prices have experienced a dramatic correction, falling nearly ₹2 lakh or around 45% from their record high of ₹4,39,337 hit in late January this year. According to reports from LiveMint, this massive decline has left investors grappling with whether to buy the dip or stay on the sidelines. The correction has been accompanied by similar trends in gold, which has fallen over ₹51,000 from its peak of ₹2,02,984 per 10 grams. While the correction has made precious metals appear attractive, volatility remains elevated, keeping sentiment divided among investors.
The recent decline in silver prices is primarily linked to global macroeconomic developments, as reported by LiveMint. The failure of U.S.-Iran talks has escalated tensions around the Strait of Hormuz, raising concerns over global energy supply disruptions. Rising crude oil prices with Brent near $103 and WTI above $105 have fueled inflation fears, complicating the outlook for interest rate cuts. Higher oil prices have strengthened expectations of a prolonged high-interest-rate environment, which is typically negative for precious metals. A stronger U.S. dollar has further added pressure, making silver more expensive for global buyers and reducing demand.
Unlike gold, silver's dual nature as both a precious and industrial metal has amplified its downside, according to experts cited by LiveMint. Concerns over slowing global growth have weighed on industrial demand for silver, particularly in sectors such as electronics, solar panels, and manufacturing. This has made silver more sensitive to economic cycles, leading to sharper volatility compared to gold. Global silver prices are down over 8% in a month, and the metal has corrected more than 20% during the recent conflict phase, highlighting the intensity of the sell-off.
Foreign institutional investors have withdrawn a staggering $18 billion from Indian equities since the Iran war began in late February, causing the Nifty to tumble more than 9% from its 52-week high. As per The Economic Times, what was once the world's favorite emerging market growth story has rapidly transformed into a "no-go" zone as global capital flee capital flow pressures and rising energy prices. Market data shows that India remains an outlier in emerging markets as it saw outflows extend to the fifth consecutive week while other EMs saw flows stabilizing. The two-week truce in the Iran-US conflict gave markets a brief bounce, but institutional investors are not treating it as a turning point, viewing the pause as tactical rather than diplomatic.
Tata Mutual Fund has advised a cautious and staggered investment approach for silver, as reported by LiveMint. The brokerage noted that silver is facing pressure due to weakening industrial demand and a softer global growth outlook, with easing supply tightness further weighing on prices. "Silver prices witnessed selling along with decline in industrial metals over demand concerns. The deteriorated global economic outlook may limit the demand for silver over the medium term," said the brokerage. Despite recent price swings, Tata Mutual Fund maintains that the structural case for silver remains intact, supported by factors such as high global debt levels, persistent inflation risks, and expanding industrial demand from sectors like solar energy and green technologies.
