Geopolitical tensions in West Asia hit the domestic stock markets on Thursday with the benchmark Bombay Stock Exchange (BSE) 30-share Sensitive Index (Sensex) tumbling by 654.25 points or 2.33 per cent, its biggest daily fall in nearly three months.
Sensex closed at 27,457.58, after touching a low of 27,384.87 as the index lost 726.96 points in intra-day trading, before closing with a recovery of 72.71 points from lower levels.
On the National Stock Exchange (NSE), the 50-share Nifty closed at 8342.15 with a loss of 188.65 per cent or 2.21 per cent.
Saudi Arabia had launched air-strikes in Yemen with the support of other Arab nations, to remove the Houthi rebels, who were aiming to topple the Yemen Government. This resulted in oil prices surging in the international markets.
“Basically the writing was on the wall for a while, despite the Reserve Bank of India (RBI) embarking on a rate cut cycle,” said Ambarish Baliga, a stock market analyst. “It was expected that the market would correct as there was no serious correction in the last 10 to 12 months,” Mr. Baliga added.
All indices ended in the negative territory. “The bear onslaught continued for the seventh consecutive session as weak global cues, Middle-East worries and Futures & Options expiry dragged the indices,” said Amar Ambani, Head of Research, India Infoline (IIFL)
An all time high of Sensex and Nifty were recorded on March 4 at 30024.74 and 9119.20, respectively, when the RBI Governor announced a second rate cut of 25 basis points in this calendar year.
Another big fall was witnessed on March 9 as the Sensex dipped by 604.17 points, but held much above the 28,500-mark at 28,844.78 at the close. Rupee slips 34 paise.
Stocks fall in America, Europe and Asia
Stock markets around the world were knocked lower and oil prices jumped as much as 6 per cent on Thursday after Saudi Arabia and its allies carried out air strikes in Yemen that also stung the dollar. Key indexes on Wall Street, which had already been declining this week on fears U.S. economic growth may be slowing, were down as much as one per cent in early trading, while the Japanese yen and the Swiss franc rose against the dollar.
The pan-European FTSEurofirst 300 index was down 1.3 per cent. In Germany, a major industrial economy heavily dependent on oil imports, the DAX index was down 1 per cent. Wall Street’s Dow Jones industrial average was last down 107.31 points, or 0.61 per cent, to 17,611.23, the S&P 500 lost 11.86 points, or 0.58 per cent, to 2,049.19 and the Nasdaq Composite dropped 38.27 points, or 0.78 per cent. — Reuters
Gold sprints to 3-week high
Gold prices spurted by Rs.400 to trade at Rs.26,950 per 10 grams at the bullion market in New Delhi on Thursday after the precious metal climbed above $ 1,200 an ounce in Singapore. Bullion traders attributed the sharp rally in gold prices to a firming trend in overseas markets as Middle-East unrest boosted demand for safe-haven.
Oil prices surge
Brent crude surged by as more than 5 per cent on Thursday after Saudi Arabia and its Gulf Arab allies began air strikes in Yemen, before paring gains by almost half to trade back near $58 a barrel.
Brent futures were up $1.69 at $58.17 by 1431 GMT, off an earlier high of $59.78. U.S. crude was up $1.12 at $50.33 a barrel, after reaching $52.48 earlier in the session when both contracts gained around 6 per cent.
"The bear onslaught continued for the seventh consecutive session as weak global cues, Middle-East worries and Futures & Options expiry dragged the indices." — India Infoline Head of Research
