Sensex tanks 360 pts as Saudi purge stokes inflation fears

Surrendering early gains, benchmark Sensex tumbled 360 points to end at 33,370.76 on Tuesday as wary investors booked profits amid fears of a flare-up in crude oil prices following the shakedown in Saudi Arabia.

The 30-share index hit an all-time high of 33,865.95 intra-day, before slumping to 33,341.82 in late afternoon deals on across-the-board sell-off. The index finally settled at 33,370.76 points, down by 360.43 points, or 1.07% over its last close.

The broader NSE Nifty too dived by 101.65 points, or 0.97%, to close at 10,350.15. Both the key indices suffered their biggest single session fall since September 27.
Oil prices climbed 3.5% overnight to quote above $64 a barrel, the highest since early July 2015, as Saudi Arabia's crown prince cemented his power with an anti-graft crackdown which sparked fears of fresh geopolitical tensions and disruption in crude supplies.

A spurt in oil prices can trigger a fresh bout of inflation and spoil the fiscal maths of net energy importers like India. A weakening rupee, which depreciated by 39 paise to 65.07 against the dollar during the day, too dampened investor sentiment.
"Political disturbance in Saudi is triggering high volatility in the crude prices, which is negative for India leading to depreciation in INR," said Vinod Nair, Head of Research, Geojit Financial Services Ltd. Foreign portfolio investors bought shares worth a net Rs 576.27 crore on Monday,

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