Mumbai, Aug. 8: US President Barack Obama’s authorisation of targeted air strikes in Iraq today pummelled stocks as investors offloaded shares on worries that the crisis would drag on.
There were other geopolitical developments that affected investor sentiment, too.
Russian President Vladimir Putin continued with the retaliatory measures by banning food imports from the western countries. Russia faces sanctions by the US and European countries.
The BSE Sensex today crashed around 260 points to close at a nearly four-week low of 25329.14.
After opening at 25406.87, lower by over 180 points, the Sensex dipped to an intra-day low of 25232.82, a loss of nearly 350 points over its previous close. The index ended the day at 25329.14, a steep loss of 259.87 points, or 1.02 per cent.
The 30-share index has plunged 578.87 points, or 2.23 per cent, in straight three days.
Experts said that the outlook for stocks in the near term was not positive as investors would remain apprehensive of global developments, particularly in Iraq. There are concerns that a prolonged crisis in Iraq would impact global crude oil prices and the rupee. India imports around 80 per cent of its oil requirements.
The broader 50-issue Nifty of the NSE ended lower by nearly 81 points, or 1.06 per cent, to end at 7568.55.
It had earlier finished at 7526.65 on July 15.
“The US authorising targeted airstrikes on Iraq was the latest trigger. There was growing unease over the crisis in Ukraine. Indian markets were not insulated from the sell-off in global markets as it signed off the week in the negative zone’’, Sanjeev Zarbade, vice president (private client group research) of Kotak Securities, said.
On the BSE, 10 out of 12 sectoral indices closed weak between 0.29 per cent and 3.86 per cent, with realty, metal, consumer durables, bankex and auto taking the lead. Only select defensive shares from pharmaceutical and FMCG segments closed with small gains.
The sentiment was also hit by the rupee slumping to a five-month low of 61.74 in intra-day trade against the dollar with a spurt in global crude prices.