The Sensex recorded its biggest single-day fall in three months on Friday when the index plunged 654 points, or 2.3%, to end at 27,457.58, on fears that foreign funds may pull out of emerging markets including India to avoid the adverse impacts of volatility following Saudi Arabia’s air raids on Yemen. The Nifty also lost 189 points, or 2.21%, to 8,342.15.
Tracking weak equities, the rupee slipped 34 paise to end at 62.67 against the US dollar. Gold, however, rose Rs 400 to Rs 26,950 per 10 grams in the national capital after the yellow metal climbed above $1,200 an ounce in Singapore due to its safe-haven appeal.
The sell-off in the markets also pulled down the market value of BSE-listed firms below the crucial Rs 100 lakh-crore mark to Rs 99,66,783 crore.
Saudi Arabia launched air strikes against Houthi rebels in Yemen in what is widely considered as a sectarian fight, which pushed up prices of crude oil and sparked uncertainty in the equities markets, which had already been on a weak trend due to the expiry of the futures contracts.
Brent crude oil soared 4% towards $59 a barrel, on concerns that airstrikes in Yemen, which sits on a key shipping passage between Europe and the Arab Gulf, could push up global prices.
“Geopolitical tension in West Asia triggered selling pressure across the globe and domestic benchmarks lost on F&O expiry day,” said Jayant Manglik, president, retail distribution, Religare Securities. “In the absence of any major event on the domestic front, global cues would dictate the market trend in the coming days ahead.”
Of the 30 Sensex stocks, 26 ended in the red led by HDFC (down 5.32%), Wipro (down 4.01%) and Sesa Sterlite (down 3.90%).
Selling was broad-based as 11 out of 12 sectoral indices closed lower led by banking, metal and IT."Quarterly results are also expected to be subdued," said Dipen Shah, head, private client group research, Kotak Securities.