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Unrest weighs on stocks

Mumbai, June 18: The Sensex washed out a major part of its previous day’s gains on across-the-board selling and closed down about 275 points today as rising crude prices caused by the Iraq unrest threaten India’s economy.

The market got a jolt when the news of the militant attack on Iraq’s main oil refinery this morning filtered in. The Sensex plunged over 400 points in the afternoon.

In energy trading, benchmark crude oil for July delivery added 41 cents to $106.77 on the New York Mercantile Exchange. Slowdown in foreign funds inflow and a sharp rise in the rupee value to near 60.40 in mid-session deals also weighed on the domestic stock market sentiment.

Eleven of the twelve BSE sectoral indices closed in the red logging, losses between 0.72 per cent and 2.10 per cent.

Realty, oil & gas, power, consumer durable, banking, auto and IT took the lead in the downslide, while only the healthcare index finished in the green.

The BSE 30-share indicator resumed better and moved in a narrow range till early mid-session. After falling sharply to a low of 25114.30, it recovered some ground to end at 25246.25, a net fall of 274.94 points, or 1.08 per cent.

Yesterday, it had shot up 330.71 points, or 1.31 per cent.

The 50-issue CNX Nifty of the NSE also slumped 73.50 points, or 0.96 per cent, to end at 7558.20.

Jignesh Chaudhary, head of research, Veracity Broking Services, said: “There was concern over the impact of higher oil prices on inflation as India imports 80 per cent of its oil requirements and higher oil prices will automatically elevate the inflation.”

After the markets closed on Tuesday, the government unveiled a host of steps to tame inflation.

World stocks were muted today as investors waited for an update on the US economy later tonight from the Federal Reserve following its two-day policy meeting where it is widely expected to cut monthly stimulus further by $10 billion.

 
 
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