BSE Sensex tumbles 260 pts on geopolitical tensions, weak Indian rupee

Written by Agencies | Mumbai | Updated: Aug 8 2014, 23:26pm hrs
SensexBSE Sensex falls 259 pts on global sell-off, closes at 25,329 pts.
Falling for the third straight session, the BSE benchmark Sensex today plunged by 260 points to close at nearly three-week low of 25,329.14 on selling pressure sparked by escalating geopolitical tensions after US President Barack Obama authorised air strikes in Iraq.

The Indian rupee slumping to five-month low of 61.74 (intra-day) against the US dollar and rising global crude prices too impacted the trading sentiment. Updates: Indian rupee vs US dollar, others

After opening lower at 25,406.87, the 30-share Sensex dipped to 25,232.82 at one point before ending the day at 25,329.14, down 259.87 points or 1.02 per cent, from its previous close.

The BSE barometer had lost 319 points in the previous two sessions.

Global markets closed in the negative for the week on the back of geopolitical tensions. The US authorizing targeted airstrikes on Iraq was the latest trigger. There was growing unease over the crisis in Ukraine. Indian markets were not insulated from the sell-off in global markets as it signed off the week in the negative zone. Capital goods, metals and realty stocks sold off. Going ahead, geopolitical tensions would continue to be in limelight, we believe. Investors are advised to utilize the opportunity to buy into quality stocks with strong management pedigree, says Sanjeev Zarbade, Vice President- Private Client Group Research, Kotak Securities.

The 50-share NSE Nifty dipped below the 7,600 mark by plunging 80.70 points, or 1.06 per cent, to end at 7,568.55.

Brokers said sentiments turned weak on foreign capital outflows that took weak cues from on worsening geopolitical tensions and the rupee slumping to five-month low amidst rising crude oil prices.

Globally, major stocks markets in Asia fell in the range of 1-2 per cent, while most of the European markets were down over 1 per cent in early trade as global sell-off spread.

Extending downtrend for the third consecutive day, Bhushan Steel shares slumped 10 per cent to hit its lowest trading permissible limit for the day of Rs 219.35 on the BSE after the CBI arrested Neeraj Singal, Vice Chairman and Managing Director of the company, in connection with Rs 50 lakh bribery scandal involving Syndicate Bank.

HIGHLIGHTS

* BSE index falls 1.02 pct; NSE ends 1.06 pct lower

* NSE index closes below 50-DMA for the first time since Feb

* Factory output, inflation data eyed

* Hindalco falls; unit Novelis oper profit lags some estimates

Indian shares mark second consecutive weekly fall on geopolitical concerns

(Reuters) Indian shares fell 1 percent on Friday, to mark their third consecutive session of declines, as blue-chips such as Larsen & Toubro slumped on global risk aversion after U.S. President Barack Obama authorised targeted air strikes in Iraq.

Global shares tumbled on Friday on rising worries of another drawn-out conflict in the region. The broader NSE index also closed below its 50-day moving average for the first time since Feb. 21, sparking worries of a further sell-off.

Also, a hawkish stance by the cental bank in its monetary policy review on Tuesday coupled with sustained selling by overseas investors who are largely responsible for the indexes touching record highs in the previous month, also weighed

Foreign investors sold shares worth $11.92 million on Thursday, provision exchange data shows, totalling sales of $321 million in July so far.

The falls on Friday sent the NSE index down 0.44 percent, for a second consecutive weekly fall.

"People will continue to book profits on reasons like global uncertainty, and valuations, but there wont be a sell-off," said G. Chokkalingam, founder of Equinomics, a research and fund advisory firm.

The benchmark BSE index lost 1.02 percent, or 259.87 points, to end at 25,329.14, also falling 0.6 percent to mark its second straight weekly fall.

The broader NSE index fell 1.06 percent, or 80.70 points, to end at 7,568.55.

Blue-chips were among the leading decliners. Larsen & Toubro lost 2.6 percent while HDFC Bank fell 1.9 percent.

Among other blue-chips, Sesa Sterlite ended down 5.9 percent while Axis Bank lost 2.7 percent.

Reliance Industries fell 0.9 percent and Oil and Natural Gas Corp ended 1.5 percent lower.

Tata Motors fell 2.1 percent ahead of its April-June earnings on Monday.

Hindalco Industries fell 2.7 percent after its unit Novelis Inc's April-June operating profit lagged some estimates, analysts say.

Nestle India Ltd fell 0.8 percent after April-June margins disappointed.

However, MM Forgings Ltd jumped 13.7 percent adding to its 20 percent gain in the previous session after the company on Wednesday posted its highest ever quarterly revenue and profit in April-June.

FACTORS TO WATCH

* Yen, Swiss franc benefit from Iraq concerns

* Oil gains $1 on plans for U.S. air strikes in Iraq

* Shares tumble as U.S. authorises air strikes

* Foreign institutional investor flows