Investors become poorer by over Rs 3 lakh cr in two days of market fall
THE BSE Sensex crashed nearly 788 points, its worst session in about six months, as escalating US-Iran tensions sent crude oil prices soaring and also made investors shun equities and rush to safe haven assets. At the closing bell, the 30-share Sensex was at 40,676.63, down 1.90 per cent or 787.98 points -- the biggest single-day drop since July 8. After opening the session on a subdued note, the BSE gauge broadened losses and hit an intra-day low of 40,613.96. Similarly, the 50-scrip NSE Nifty closed at 11,993.05, falling by 1.91 per cent or 233.60 points.
On the Sensex chart, Bajaj Finance was the top loser, dropping 4.63 per cent, followed by SBI, IndusInd Bank, Maruti, HDFC, Hero MotoCorp, Axis Bank, ICICI Bank and Reliance Industries. Bucking the broader trend, only Titan and PowerGrid ended with gains. All sectoral indices ended in the red, with BSE metal, finance, realty, bankex, energy, auto, oil and gas, capital goods and healthcare indices cracking up to 2.96 per cent.
While, broader BSE midcap and smallcap indices slumped up to 2.31 per cent. Along with soaring crude prices, the negative impact of weakening Indian currency is also weighing on equities. The Indian rupee dropped 13 paise to close at 71.93 against the US dollar on Monday amid rise in crude benchmark Brent Futures, quoted last at USD 69.64 per barrel -- an increase of 1.37 per cent in price. “The ground reality is unstable, global market feels that this (US-Iran) tension can escalate further. Investors are closing their current position and shifting to haven assets leading to a mount in bond yield, oil and gold prices,” Vinod Nair, Head of Research, Geojit Financial Services, said.
Global markets too remained under pressure after US President Donald Trump warned Iran of major retaliation if Tehran carries out any attack against America to avenge the killing of top military commander Qasem Soleimani and hinted at striking its cultural sites. Bourses in Shanghai, Hong Kong, Tokyo and Seoul ended lower. European markets were also trading in negative terrain in early sessions. Trump’s statement came hours after Iran announced it will no longer abide by the limits contained in the 2015 landmark nuclear deal. The US President also threatened to impose “very big sanctions” on Iraq if it follows through on a Parliament vote calling for the expulsion of US troops based in the country.
Analysts opined that the Indian market is reacting more negatively than other emerging markets due to crude oil impact. Investors become poorer by over Rs 3 lakh cr in two days of market fall: INVESTOR wealth tumbled by a whopping Rs 3.36 lakh crore in two successive sessions of decline in the equity market following escalation in tensions in the Middle East. Equity markets fell for second consecutive session, with the 30-share key BSE index plummeting 787.98 points, or 1.90 per cent, to close at 40,676.63, on Monday. During the trade, it dropped 850.65 points to 40,613.96.
The Sensex had ended 162.03 points, or 0.39 per cent, lower at 41,464.61 on Friday as well. Led by the weakness in equities in two consecutive trading sessions, the market capitalisation of BSE-listed companies plunged by Rs 3,36,559.82 crore to Rs 1,53,90,312.60 crore. “Indian markets started the week on a negative note amid escalation of geopolitical tensions between the US and Iran. Rising crude oil prices and adverse rupee movement too impacted the sentiments,” Religare Broking Ltd VP - Research Ajit Mishra said. “Amongst the broader markets, BSE midcap and smallcap under performed. All the sectoral indices witnessed heavy selling pressure and ended with losses wherein auto, banking and metals were the top losers,” he added.
Gold hits all-time high, oil prices surge too
DOHA/NEW DELHI :
OIL and gold prices continued surging on Monday as escalating tensions in the Middle East fanned worries about disruption to global oil supplies, sending investors scurrying to safer investments. Gold prices in India hit an all-time high level on Monday and zoomed Rs 720 to Rs 41,730 per 10 gram following a pick-up in safe-haven demand for the metal amid weak equities and bullish global trends, according to HDFC Securities. Brent crude oil soared past 70 dollars a barrel, rising by more than 2%, while West Texas Intermediate crude rose by 1.8% to 64.21 dollars.