Sensex slips 162 pts, Re loses 44p to 71.81
Mumbai: Thanks to the growing geopolitical tension in the Middle East due to the US airstrike that killed one of I ran Major military commanders, world markets, including India, showed a nervous trend on Friday with the sensex closing 162 points below 41,465. The increase in crude oil prices and the weakness of the rupee, which fell 44 paise to 71.81, weighed on the sentiment of investors on Dalal Street. The price of gold, generally a safe haven in times of uncertainty, skyrocketed.
According to Kotak Securities senior VP (equity technical research) Shrikant Chouhan, equity markets globally — including in India — tumbled on news of fresh geopolitical tensions arising between the US and I ran . “Both the key stock indices faltered...although the broader and the medium-term trends of the market are still intact. The short-term trend of the market is disturbed and the sentiment may remain weak.”
Brokers feel that since US- I ran tensions were already high owing to US sanctions on I ran , the attack on Saudi oil facilities last year and various incidents in the Middle East, the day’s development will further intensify problems between the two countries in the short term. However, the market reaction may subside if there is no retaliatory move by I ran or no major exchange of words between Tehran and Washington, traders said. Since rising crude prices and a weak rupee could spark inflation, which in turn could keep the rate of inflation at an elevated level, banking and financial services stocks were sold aggressively. In Friday’s session, HDFC Bank, Axis Bank and SBI contributed most to sensex ’s slide, while TCS, Infosys and HCL Tech cushioned the fall to some extent.