Sensex nosedives 348 points amid crude prices surge

Lowest closing level in over four months

Sensex nosedives 348 points amid crude prices surge

Key benchmark indices slipped into the red and hit fresh intraday low in early afternoon trade on Friday on the back of a surge in crude oil prices as escalating violence in Iraq threatened supplies from OPEC's second-largest oil producer. 

It is a common knowledge that any increase in crude oil prices raised concerns about India's current account deficit and fiscal deficit as the country imports majority of its crude oil requirements. Meanwhile, the popular BSE Sensex lost 348.04 points or 1.36 percent to settle at 25,228.17, its lowest closing level since 5 June 2014. The index lost 404.60 points at the day's low in mid-afternoon trade and jumped 112.10 points at the day's high in early trade, its highest level since June 11, 2014.

The 50-unit CNX Nifty at NSE shed 107.80 points or 1.41 percent to settle at 7,542.10, its lowest closing level since June 5, 2014. The index hit a low of 7,525.35 and a high of 7,678.50 in intraday trade, its highest level since June 11, 2014.

The market breadth indicating the overall health of the market turned negative from positive. A bout of volatility was witnessed in early trade as key benchmark indices regained positive terrain after slipping into the red for a brief period after opening with decent gains. Shares of oil marketing companies like BPCL, HPCL and IOC slipped as much as 8 per cent as international crude prices shot up on concerns of supply disruption following tensions in Iraq, while Cairn India rose along with crude oil prices. 

In the capital goods sector Bharat Heavy Electricals (Bhel) rose after the company said that it has commissioned one more hydro generating unit of 68 megawatts (MW) at Rampur Hydro Electric Project (HEP) in Himachal Pradesh, thus successfully commissioning a total four units of the 412 MW hydro power plant of SJVN. Deepak Nitrite rose after the company said it has fixed  June 23, 2014 as record date for 5-for-1 stock split and also for 1:1 bonus issue.

In the broader markets, the BSE Mid-Cap index lost 230.38 points or 2.51 percent to settle at 8,935.93, while the BSE Small-Cap index lost 310.90 points or 3.11 percent to settle at 9,674.58. Both these indices underperformed the Sensex.



The market breadth indicating the overall health of the market was weak, with more than 2 losers for every gainer on BSE. In actuality, as many as 2,208 shares on BSE fell and 895 shares rose, while a total of 66 shares remained static or unchanged.  The total turnover on BSE amounted to Rs 5254 crore, which is higher than Rs 3812.71 crore on June 12, 2014.

In the global markets this day, European stocks declined as an escalation of violence in Iraq sent energy prices higher, while investors assessed comments from Bank of England Governor Mark Carney on the next rate hike. Key benchmark indices in UK, France and Germany were off 0.9 to 1.06 percent.

Asian stocks were mixed in choppy trade on Friday after data showed China's industrial output and retail sales growth accelerated in May. Key benchmark indices in Singapore, Japan, China and Hong Kong were up 0.01 to 0.93 percent, while key indices in Indonesia, Taiwan, and South Korea were off 0.09 to 1.03 per cent.

Trading in US index futures indicated that the Dow could fall 22 points at the opening bell on Friday. US stocks fell on Thursday as concerns escalated about Iraq and after disappointing economic data on retail sales and jobless claims.

Reverting to domestics, in the foreign exchange market, the local currency rupee edged lower against the dollar as crude oil prices rose as escalating violence in Iraq threatened supplies from OPEC's second-largest oil producer. The partially convertible rupee was hovering at 59.47, compared with its close of 59.25/26 on Thursday.

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