Sensex crashes over 800 points in afternoon session, Nifty below 12,000-mark on increasing tensions between US, Iran

Sensex was trading 376.66 points or 0.91 percent lower at 41,087.95 while the broader NSE Nifty cracked 109.60 points or 0.90 percent to 12,117.05

FP Staff January 06, 2020 10:11:02 IST
Sensex crashes over 800 points in afternoon session, Nifty below 12,000-mark on increasing tensions between US, Iran
  • The 30-share BSE index was trading 720.80 points or 1.74 percent lower at 40,743.81. Similarly, the broader NSE Nifty cracked 215.25 points or 1.76 percent to 12,011.40.\

  • Bajaj Finance was the top loser in the Sensex pack, diving up to 4 percent

  • The rupee depreciated by 31 paise to 72.11 in early trade on Monday weighed by the spike in crude oil prices, amid rising concerns over US-Iran tensions

Extending early losses,  Sensex crashed over 800 points while Nifty was down 200 points in the afternoon session on Monday as the escalation in tensions in the Middle East fuelled intense selloff in global equities.

The 30-share BSE index was trading 820.28 points or 1.97 percent lower at 40,644.33. Similarly, the broader NSE Nifty cracked 244.55 points or 2 percent to 11, 982.10.

The Sensex crashed to over 650 points in a rapid descent since morning trade. In later morning trade Sensex was down 660.15 points or 1.59 percent at 40,804.42. The Nifty was down 183.30 point or 1.5 percent at 12,043.35 points.

The Brent climbed over 2 percent to $70 a barrel as tensions in the Middle East lifted crude prices, stoking fears of inflationary pressures as well as a rise in the import bill for the world’s third-biggest oil consumer.

Extending early losses, the Sensex briefly plunged to over 700 points in the afternoon session on Monday as escalation in tensions in the Middle East fuelled intense selloff in global equities.

The 30-share BSE index was trading 699.31 points or 1.69 percent lower at 40,765.30. Similarly, the broader NSE Nifty cracked 209.50 points or 1.71 percent to 12,017.15.

Bajaj Finance was the top loser in the Sensex pack, diving up to 4 percent, followed by SBI, HDFC, Maruti, Asian Paints Hero MotoCorp and IndusInd Bank.

According to traders, domestic market witnessed heavy selloff as global stocks slumped after US President Donald Trump vowed "major retaliation" if Iran tries to avenge the killing of its key military commander Qasem Soleimani and doubled down on a threat to bomb Iranian cultural sites. He also threatened to impose "very big sanctions" on Iraq if it follows through on a parliament vote calling for the expulsion of US troops based in the country.

Following the news Brent, oil prices surged nearly 3 percent to $70.59. Bourses in Hong Kong, Shanghai, Tokyo and Seoul were trading up to 2 percent lower.

The BSE Sensex sank over 350 points in the opening session on Monday as an escalation in tensions in the Middle East fuelled volatility in global equities. The 30-share BSE index was trading 376.66 points or 0.91 percent lower at 41,087.95. Similarly, the broader NSE Nifty cracked 109.60 points or 0.90 percent to 12,117.05, according to a PTI report.

In the opening session, SBI was the top loser in the Sensex pack, shedding up to 2.91 percent, followed by Asian Paints, PowerGrid, Maruti, Mahindra and Mahindra, Tata Steel, NTPC, ICICI Bank and HDFC.

On the other hand, Titan, TCS, HCL Tech, Infosys and Tech Mahindra were trading in the green. In the previous session, the 30-share gauge ended 162.03 points, or 0.39 percent, lower at 41,464.61, while the Nifty closed 55.55 points, or 0.45 percent, down at 12,226.65.

Sensex crashes over 800 points in afternoon session Nifty below 12000mark on increasing tensions between US Iran

Reuters

Rupee tanks 31 paise The rupee depreciated by 31 paise to 72.11 in early trade on Monday weighed by the spike in crude oil prices, amid rising concerns over US-Iran tensions.

US President Donald Trump on Sunday vowed "major retaliation" if Iran tries to avenge the killing of its key military commander Qasem Soleimani.

Forex traders said spike in crude oil prices was largely a knee-jerk reaction to the rising tensions between the US and Iran.

At the Interbank Foreign Exchange, the rupee opened on a weak note at 72.03 then fell further to 72.11 against the US dollar, showing a decline of 31 paise over its previous closing.

On Friday, the rupee had settled at 71.80 against the US dollar.

Trump, speaking on Air Force One on his way back to Washington from a vacation in Florida, also said he would impose "very big sanctions" on Iraq if it follows through on a parliament vote calling for the expulsion of US troops based in the country.

The global benchmark, Brent crude oil was trading at USD 70.59 per barrel, higher by 2.90 per cent.

The dollar index, which gauges the greenback's strength against a basket of six currencies was trading unchanged at 96.84.

The 10-year government bond yield was at 6.55 percent.

Gold, oil soar, shares slip as US, Iran trade threats

A gauge of Asian shares was toppled from an 18-month top on Monday as heightened Middle East tensions sent investors scurrying for the safety of gold, which hit a near seven-year high while oil jumped to four-month peaks.

The United States detected a heightened state of alert by Iran’s missile forces, as President Donald Trump warned the US would strike back, “perhaps in a disproportionate manner,” if Iran attacked any American person or target, a Reuters report said.

Iraq’s parliament on Sunday recommended all foreign troops be ordered out of the country after the US killing of a top Iranian military commander and an Iraqi militia leader.

Spot gold surged 1.5 percent to $1,579.55 per ounce in jittery trade and reached its highest since April 2013.

Oil prices added to their gains on fears any conflict in the region could disrupt global supplies.

Brent crude futures rose $1.46 to $70.06 a barrel, while US crude climbed $1.17 to $64.22.

“The risk of further escalation has clearly gone up - given the direct attack on Iran, Iran’s threat of retaliation and Trump’s desire to look tough - posing the threat of higher oil prices,” said Shane Oliver, chief economist at AMP Capital.

“Historically though oil prices need to double to pose a severe threat to global growth and we are a long way from that.”

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.7 percent.

Japan's Nikkei slid almost 2 percent in a sour return from holiday, while E-Mini futures for the S&P 500 fell 0.5 percent in very choppy trade.

Chinese shares opened in the red too, with the blue-chip CSI300 index off a shade while Australian shares were off 0.4 percent.

“Geopolitical tensions look like remaining elevated in the coming days, so lending support to oil prices and keeping risk asset markets on the defensive,” said Ray Attrill, head of FX strategy at National Australia Bank.

Sovereign bonds benefited from the safety bid with yields on 10-year Treasuries down at 1.769 percent having fallen 10 basis points on Friday. Treasury futures gained 5-1/2 ticks.

In currency markets, the Japanese yen remained the favoured safe harbour courtesy of Japan’s massive holdings of foreign assets. Investors assume Japanese funds would repatriate their money during a truly global crisis, pushing the yen higher.

On Monday, the dollar was last at 107.98 yen, after falling to a three-month trough of 107.78 earlier in the session. The euro likewise eased to 120.55 yen having hit a three-week low.

The dollar was steadier against the other majors, with the euro little changed at $1.1161 EUR=. Against a basket of currencies, the dollar was holding at 96.86.

The risk-sensitive currencies of Australia and New Zealand were on track for their fourth straight session of losses.

--With inputs from agencies

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