Sensex tanks on Libya | business | Hindustan Times
Today in New Delhi, India
Dec 09, 2016-Friday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Sensex tanks on Libya

business Updated: Feb 25, 2011 02:28 IST
HT Correspondent
HT Correspondent
Hindustan Times
Highlight Story

It turned out to be a Terrible Thursday as India's stock markets witnessed their worst fall in more than 18 months in points terms.

The Bombay Stock Exchange benchmark Sensex tumbled by 546 points (3%) to end at a seven-month low of 17,632 after the ugly political crisis in oil producer Libya took world crude prices to a 30-month high of $120 per barrel.

The broader Nifty at the National Stock Exchange fell by 174.6 points 3.2 per cent to 5,263.

High oil prices have a knock-on effect as they increase trade deficit, manufacturing costs and industrial demand.

Experts advised retail investors not to venture into a volatile market for quick gains and stick to systematic investment plans of mutual funds to buy into stocks.

Indian markets fared the worst as most Asian and European markets fell by around 1% while China's Shanghai Composite index closed the day with an actual gain of 0.6%.

"I think the markets are over-reacting to concerns that the Libya crisis may spread across other nations and that there will be oil supply problems," said Pankaj Pandey, head of research at ICICI Securities.

A sell-off in the futures and options (F&O, derivatives) segment added to the market mood as speculators avoided fresh orders on the last day of their trading settlement period.

"The steep fall was so swift that every pullback attempt was used for further selling," said Amar Ambani, head of research at India Infoline.

http://www.hindustantimes.com/Images/HTEditImages/Images/25_02_11-buss-23.jpg

Worst-hit were stocks in the banking, consumer durables and capital goods industries.

Some analysts say a growth-oriented budget for 2011-12 may improve market sentiments.

"Most of the negativity is already discounted and a good budget focusing on infrastructure spending can bring a balance to the India growth story which as of now is skewed towards consumption-led growth," said Pandey.