Sensex crashes 651 pts, rupee slips to 67.63 on Syria tension
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Sensex crashes 651 pts, rupee slips to 67.63 on Syria tension

Last Updated: Tuesday, September 3, 2013, 19:10
 
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Sensex crashes 651 pts, rupee slips to 67.63 on Syria tension
Mumbai: The Indian rupee and stock markets plunged Tuesday, with benchmark Sensex crashing by 651 points on reports that missiles were fired at Syria, raising fears of disruption in oil supply and spike in prices.

The partially-convertible Indian rupee slipped below 68 against a dollar, losing more than two percent of its value in the day trade.

Rupee closed at 67.63 to a dollar. It had touched a record low thus far of 68.80 against the dollar on Aug 28, 2013.

The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 19,002.77 points, closed at 18,234.66 points, crashing by 651.47 points or 3.45 percent from the previous day's close at 18,886.13 points.

The Sensex touched a high of 19,007.31 points and a low of 18,166.17 points during trade so far.

The wider 50-scrip S&P CNX Nifty of the National Stock Exchange (NSE) also slumped 3.77 percent or 209.30 points at 5,341.45 points.

Concerns have been raised over escalation in tensions in Syria with a possible US intervention and, thereafter, the fallout on oil prices. India currently imports almost 79 percent of its total crude oil requirements.

Increase in price of crude oil due to the Middle East crisis will further lead to widening of India's current account deficit (CAD).

The Indian government subsidises retail selling prices of diesel, kerosene and cooking gas to insulate domestic users from the impact of rise in international oil prices and to contain domestic inflationary conditions.

According to the current estimates, for 2013-14, the three state-owned oil marketing companies (OMCs) are slated to incur under-recovery of Rs.144,000 crore on sale of three sensitive products.

The OMCs incurred under-recovery of Rs.161,029 crore during 2012-13 and Rs.25,579 crore during April-June 2013.

"A combination of sell-off in leading emerging market currencies and fresh jitters in the Middle East has been driven rupee lower. Indian equity market suffered a steep sell-off, with leading indices dropping close to four percent," said Anindya Banerjee, currency analyst at Kotak Securities.

"Over the near-term, fears of US Fed tapering and tensions in Middle East could put rupee under pressure, with risk emerging for a sell-off beyond 69.00 levels on spot.”

In Tuesday's trade, stocks of companies in sectors like banking, oil and gas declined after the Russian defence ministry announced that it has detected launch of two ballistic missiles from the central part of the Mediterranean Sea toward the eastern part of the Mediterranean coast.

The S&P BSE bankex plunged 526.61 points, oil and gas index tanked 303.48 points, consumer durables index dropped by 263.31 points, capital goods index slipped 259.28 points and fast moving consumer goods (FMCG) index dipped 254.37 points.

Only two scrips of the 30 sensitive index were gainers in the day's trade: Coal India, up 1.32 percent at Rs.261.20 and Mahindra and Mahindra, up 0.35 percent at Rs.769.15.

The main losers were: Hero MotoCorp, down 6.58 percent at Rs.1,893.45; Reliance Industries, down 6.07 percent at Rs.830.10; ITC, down 5.37 percent at Rs.302.25; ICICI Bank, down 5.21 percent at Rs.783.85; and Bharti Airtel, down 5.17 percent at Rs.285.

Among the Asian markets, Japan's Nikkei closed 2.99 percent up, while Hong Kong's Hang Seng closed the day's trade 0.99 percent higher. China's Shanghai Composite Index was higher by 1.18 percent.

In Europe, London's FTSE 100 was trading 0.12 percent down, while Germany's DAX Index was lower 0.32 percent. The French CAC 40 Index was 0.19 percent down.

IANS


First Published: Tuesday, September 3, 2013, 19:10


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