West Asia tensions give Dalal Street a headache
stock gauges, led by banking and financial shares, slumped more than 1% each Monday on mounting concerns of an escalation in the West Asia conflict, while likely central bank intervention in the currency markets cushioned the rupee's fall, but couldn't prevent a record closing low for the unit. Benign inflation prospects on a lower-than-expected rise in oil prices kept bond yields steady.
The Nifty fell 246.9 points, or 1.1%, to 22,272.50. The Sensex declined 845.12 points, or 1.14%, to 73,399.78 in a volatile trading session that saw mixed responses across the Asia-Pacific to this weekend's Iranian drone attacks on Israel. China advanced 1.26%, Hong Kong fell 0.73%, South Korea declined 0.42%, and Taiwan dropped 1.38%.
The rupee, meanwhile, closed at 83.45 per US dollar, slightly weaker than 83.41/$1 on Friday, on likely dollar sales by the central bank, dealers said. The previous record closing low for the local unit was 83.4450/$1.
«On Monday, India felt the impact of geopolitical tensions in the Middle East,» said Sriram Velayudhan, Senior VP Alternative Research, IIFL Securities.
Vodafone Idea FPO
«The likely unwinding of retail leverage and the impending Vodafone Idea FPO worth Rs 18,000 crore would also have contributed to the fall,» Velayudhan said.
Some investors would have cashed out of existing positions to buy into the discounted telco FPO.
Although all sectoral gauges barring oil and gas declined through the trading session, analysts do not expect a significant retreat for stocks just yet.
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