Markets volatile in morning trade after India conducts surgical strikes in Pak | business-news | Hindustan Times
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Markets volatile in morning trade after India conducts surgical strikes in Pak

Sentiments remained weak in global markets as worries about the health of Germany’s largest lender Deutsche Bank weighed on financial stocks.

business Updated: Sep 30, 2016 13:11 IST
HT Correspondent
Markets

(PTI)

Stock markets opened slightly lower on Friday, and volatility prevailed with both the benchmark indices, BSE Sensex and NSE Nifty, fluctuating between positive and negative territory in morning trades, a day after India announced it had conducted surgical strikes against terror groups along the line of control with Pakistan.

Sentiments remained weak in global markets as worries about the health of Germany’s largest lender Deutsche Bank weighed on financial stocks.

The BSE Sensex opened at 27,807.82, down about 20 points from Thursday’s close of 27,827.53 and at the last count was trading at 27,835.05, up 8 points. It had hit a high of 27904.04 earlier. The NSE Nifty50 opened at 8,581.50, down about 10 points from its previous close of 8,591.25 and at last check was at 8,607.20, up about 16 points or 0.2%.

The Rupee, which fell 39 paise to the US Dollar on Thursday, saw some bounce back on Friday. It opened up 4 paise and was trading up around 21 paise at 66.64, versus earlier close of 66.85.

On Thursday, the Sensex had plunged 465 points, the most since Britain announced its decision to exit European Union in June, as investors and traders feared India’s surgical strikes could escalate conflict between the two nations.

Analysts said it was a knee jerk reaction as the strikes took everyone by surprise, and short-term volatility may persist.

“After the Indian surgical strike across LOC, the situation remains fluid and tense with exceptionally high uncertainty over further diplomatic and military developments, although the Indian army indicated there are no plans for any more immediate strikes. Against this uncertain backdrop, the volatility in asset markets may remain high,” said Gaurav Garg and Samiran Chakraborty of Citigroup.

In the past whenever tensions between the two countries had escalated, the Kargil conflict in 1999 and then the Parliament Strike in 2001, markets were volatile over a short-term, but recovered most of the losses over a month. Analysts say the long-term investment story on India remains intact.

“While the initial response of the financial market has been negative, we believe such attacks are unlikely to have any material impact on the markets. Indian economy is currently on a sound footing with favourable macro numbers,” said Soumya Kanti Ghosh, chief economic advisor of State Bank of India.

Across Asia, markets were trading lower. Hong Kong’s Hang Seng fell the most, declining 300 points or 1.3% and Japan’s Nikkei was down more than 200 points or about 1.3%.