Sensex crashes today on surgical strikes on Pak terror camps, may fall further if Indo-Pak tension rises

By: | Published: September 29, 2016 2:07 PM

Sensex tanked by 573 points following the announcement of surgical attacks by India on Pakistan terror camps, while NSE Nifty breached the 8,600 level by slipping 186.90 points, or 2.13 per cent, to 8,558.25 on Thursday.

Sensex crashes today on surgical strikes on Pak terror camps, may fall further if Indo-Pak tension risesSensex tanked by 573 points following the announcement of surgical attacks by India on Pakistan terror camps, while NSE Nifty breached the 8,600 level by slipping 186.90 points, or 2.13 per cent, to 8,558.25.

In a knee-jerk reaction to government claims that Indian Army conducted a surgical attack on Pakistan based terror camps on Wednesday night, domestic equity markets sharply plunged on Thursday in afternoon trade triggered by all round selling. Sensex tanked by 573 points following the announcement, while NSE Nifty breached the 8,600 level by slipping 186.90 points, or 2.13 per cent, to 8,558.25. However, the markets have wiped off some losses, but were still down over a percentage point. At 1.51 pm, Sensex was trading 290.52 points down at 28,002, while NSE Nifty was trading 92.75 points down at 8652.

The markets are expected to correct further if the tension between India-Pakistan escalates in the aftermath of Uri and surgical attacks, experts said. The attacks on the terror camps from Indian side came after 18 Indian soldiers were killed in Jammu and Kashmir’s Uri town around 10 days back. However, experts also said that markets may stabilise if both the countries will stick to war of words.

Independent market expert Ambareesh Baliga said, “Market crashed on Thursday on account of rising tension between India and Pakistan. If the tension will escalate futher we can see some correction going ahead. At present it is just a knee-jerk reaction. If there will be no further strike market will find some solace from that. If Pakistan will not respond market will stablise. We can see some revision in Sensex and Nifty targets if Indo-Pak tension will escalates further.”

Meanwhile, defence stocks such as BEML, Bharat Forge, Reliance Defence and Bharat Electronics also fell by 4.81 per cent, 6.77 per cent, 5.25 per cent and 1.76 per cent, respectively and India VIX, or volatility index moved to 3-month high and was trading above 50, 100 and 200 DMAs.

Supporting Baliga’s point, Equinomics Research & Advisory founder G Chokkalingam, said, “Today’s sudden downfall in the market was because of rising problem between India and Pakistan amid some profit booking by investors at higher levels. If the issue will escalate we can see some correction going forward. However, if it is only a war of words then market will stablise soon.”

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