Bourses feel oil price heat, Sensex down 340 pts

Written by Markets Bureau | Mumbai, Jun 30 | Updated: Jul 2 2008, 03:49am hrs
Tremors of the oil price rise, which touched $ 143 a barrel, continued to be felt on the Indian bourses with political uncertainty over the Lefts plan to withdraw support to the UPA on the nuke deal adding fuel to the fire.

Except for Hang Seng and Jakarta, all other Asian markets ended the day with minor losses in the range of 1-2% and the Indian bourses followed suit for a second consecutive day on Monday.

The Sensex, after opening on a flat note, plunged to close at 13,461.60 points on Monday, posting a loss of 340.62 points or 2.47% while the Nifty lost 96.10 points or 2.31% to end at 4,040.55 points.

In the first six months of the calendar year 2008 (CY08), the 30-share Bombay Stock Exchange (BSE) Sensex shed 6,839.11 points or 33.68% while the broader Nifty of the National Stock Exchange (NSE) lost 2,103.8 points or 34.23%. Experts believe that this is the steepest fall the benchmark indices have ever seen in the first six months of a calendar year in last one decade.

A head of research of a domestic broking firm said, Markets are discounting the possibilities of crude touching the $180 level and we might see further slide in the days to come.

Commenting on the issue of political and inflationary pressure on the market, he said, India has to live with the fact that we will always have a coalition government. As far as inflation is concerned, it is mainly imported through crude prices. As measures taken by the Reserve Bank of India fructifies, everything will fall into place, even the much-doubted corporate earnings.

The selling pressure was more prominent in the broader markets leaving the overall breadth to remain negative with only 542 stocks rising as against fall witnessed by 2,107 stocks while 43 remained unchanged at the BSE.

Among the sectoral indices at the BSE, the interest rate-sensitive sectors continued to feel the heat as investors feared a further rate hike by the RBI to tame inflation. The BSE Realty index lost 331.78 points or 6.81% to settle the day at 4,543.47 points which was followed by BSE Consumer Durables and Oil & Gas, which shed 4% each. However, stocks of Information Technology sectors bucked the weak trend, ending the day with marginal gains as the rupee weakened against the dollar and breached 43-mark for the first time in the recent past.