Ukraine & Iraq conflicts, weak global cues pull Sensex down for 2nd week

Aug 09 2014, 00:25 IST
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SummarySensex falls 260 points after Barack Obama authorises air strikes in Iraq

After a good start, benchmark equity indices extended losses for the second consecutive week, and Brent crude oil futures hovered around $107 per barrel, as re-emergence of the Ukraine and Iraq tensions and global cues weighed on investor sentiment.

The Sensex on Friday declined for the third straight session, tracking the fall in Asian and European markets, after the Iraq issue intensified and the US President Barack Obama authorised air-strikes in the second largest OPEC producer and the seventh largest global oil producer.

The Sensex declined 259.87 points, or 1%, on Friday; it closed at 25329.14, after faling down 1.5% in the previous two sessions. Eventually, the 30-share gauge ended the week with a 0.6% loss. The broader Nifty lost 0.45% on a week-on-week basis.

The broader markets

continued to witness profit booking for the third week

in succession.

The Mid-cap index lost nearly 2% during the week whereas the Small-cap index lost nearly 1%. Obama, on Thursday, said that the strikes, if needed, would be used to protect US personnel and Yazidis, a minority ethnic group concentrated in northern Iraq, who have been targeted by militants and are stranded on a mountain.

Conflict in the OPEC producer has so far spared production in Iraq’s south, home to about three-quarters of its crude output, according to a Bloomberg report.

“US approval of airstrikes moved the conflict to a new level, and made its extreme potential for danger in the region visible,” Commerzbank AG’s head of commodities research Eugen Weinberg was quoted as saying in the report.

Brent futures for September settlement on the Intercontinental Exchange (ICE) advanced as much as 1.41% in London, and West Texas Intermediate (WTI) rose 1.1% in New York. Major Asian and European indices end with losses during the week.

Nikkei lost nearly 5% this week, while Hang Seng

ended down nearly 1%. Other indices like Taiex (-1.95%), KOSPI (-2.03%), FTSE Straits Times (-1.66%) were among

other losers.

In Europe, major indices were trading marginally weak and heading for a weekly decline to the tune of 1.5-5.5%.

Back home, 21 of 30 Sensex companies ended in the red on a weekly basis. Sesa Sterlite lost 5% and Tata Steel ended with 2.1% low, pulling the BSE Metal index down by 2.5% —

the biggest loser among

sectoral indices.

BSE Power (-1.61%), BSE Capital Goods (-1.49%) and CNX Bank Nifty (-2.39%) featured among other losers.

Axis Bank ended down more than 4% in the

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