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Journalism of Courage
Indian markets on Tuesday joined a global sell-off with the Sensex taking a sharp fall of 362 points in the wake of escalation in tension following the firing of a missile by North Korea over Japan. The floods in Mumbai also contributed to the slide. The BSE Sensex fell 362.43 points — 1.14 per cent — at 31,388.39, its lowest closing since August 22 when it hit 31,291.85. During the day, it moved between 31,360.81 and 31,739.80.
This is biggest single day fall since July 18 when it had lost 363.79 points. The Sensex had gained 491.97 points in the previous four sessions. The risk appetite was hit so bad that the wider NSE Nifty settled lower by 116.75 points — 1.18 per cent — its biggest single-day fall in over 9 months at 9,796.05.
Unnerving the market sentiment, the Korean peninsula was on the boil after North Korea fired the ballistic missile that flew over Japan before plunging into the Pacific Ocean, in a clear message of defiance as Washington and Seoul conduct war games nearby. This rankled investors worldwide, with Asian stocks hitting a soft patch. The negativity affected Indian markets, already cautious ahead of the August derivatives expiry On Thursday. European shares opened in the red too.
Vinod Nair, head of research, Geojit Financial Services, said: “Global market is not in a position to spread favorable cues to emerging markets due to slow pace in growth, impact of Hurricane Harvey and hike in global risk. Back home, investors can also expect some volatility ahead of the F&O expiry which will influence them to stay cautious in the near term.”
“Concerns of heavy floods in the financial capital and the heavy selling by FIIs in equities over the past one month ensured that risk appetite was down to a trickle, especially as Asian markets were in a sea of red following North Korea threats. The speeding process of NPA resolution may provide some respite to the market ahead of the F&O expiry, after it managed to hold the crucial 60 DMA level,” said an analyst.
NTPC emerged as the biggest loser plunging 2.80 per cent after the government said it would sell 5 per cent stake in the country’s largest power producer at Rs 168 to raise about Rs 7,000 crore.
Karthikraj Lakshmanan, senior fund manager, BNP Paribas Mutual Fund, said, “Stock markets in India and across the globe declined as escalating geopolitical tensions in the Korean peninsula weighed on market sentiment.” All the sectoral indices on the National Stock Exchange (NSE) traded in the red with a majority of them losing over 1 per cent.
Sun Pharma, Reliance Industries, ONGC, HDFC Ltd, Coal India and Bharti Airtel also lost up to 2.35 per cent. Shares of ACC, Bank of Baroda, Tata Power and Tata Motors DVR too were under pressure and fell by up to 2.78 per cent as these companies will move out of the NSE’s benchmark Nifty 50 index from September 29.
Meanwhile, amid heavy rains and strong winds disrupting normal life in the financial capital, bourses BSE and NSE said on Tuesday that markets will remain open on Wednesday. Markets regulator Sebi and exchanges are taking stock of the situation continuously and would decide accordingly.
