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Journalism of Courage
The escalating conflict in West Asia and soaring oil prices shook global markets today with investors trimmming their equity exposure across continents. With crude oil prices flaring up to 78 per barrel and Japan also joining the interest rate hike spree, the Sensex joined the global sell-off and plunged by 180 points.
Asian stocks dropped as investors fled to low-risk, safe-haven assets after US crude oil futures touched 78.40 a barrel in Asian trade on concerns over supply from major exporter Nigeria and heightened tensions in West Asia.
The Nikkei fell 1.67 and Hong Kong8217;s Hang Seng slipped 1. Mexico fell by 3.5, South Korea by 2.33 and Indonesia 2.28.
8216;8216;We are not a stand-alone entity in the world markets,8217;8217; said Ketan Jhaveri, director at DH Securities, adding, 8216;8216;The biggest worry for the market is oil, although eyes will be on corporate earnings too next week.8217;8217; Analysts who say that soaring crude oil prices and interest rates are big negatives for the economy in general and the industry in particular don8217;t rule out another round of petroleum price hike.
On the other hand, investors who rushed out from melting equity markets fuelled a buying spree in gold, expecting a quick return from the precious metal. As a result, pure gold 99.9 purity hardened by a margin of Rs 170 per ten grams to Rs 9,990 from Rs 9,820. Gold in Asian markets rose by 6.13 to 666.17 an ounce, the highest since May 24.
A fear of monetary tightening after the Japanese central bank raised its interest rates for the first time in six years also weighed on the sentiment, said traders. Japan8217;s central bank lifted its key rate to 0.25 from zero and affirming the end of a long era of deflation and economic stagnation.
The BSE Sensex, which is up 1.6 for the week, ended 1.7 lower at 10,678.22 points, but off the day8217;s low of 10,563.76 as long-term global investors bought beaten down blue chips. The 50-share S038;P CNX Nifty ended 1.45 lower at 3,123.35 points.
