Surgical strikes rattle Sensex, 465 points down

MUMBAI: The surprise ‘surgical strikes carried out by the Indian army across the line of control (LOC) rattled equity markets on Thursday with both the Sensex and Nifty plunging over 2 per cent in the intra-day trade.

Risk averse investors and traders were seen squaring of their long positions amidst the expiry of the September derivative series on fears that the strong retaliation by the Indian army could escalate the geo-political tension between the two nuclear-armed nations.

The Sensex tanked 572.89 points in the intra-day trade before ending the day at 27,827.53, down 465.28 points or 1.64 per cent from its Wednesday’s close. The Nifty slumped 153.90 points or 1.76 per cent to close at 8,591.25.  The Indian rupee also came under selling pressure and suffered sharp losses against the US currency. The rupee closed the day at 66.84 per dollar, down 35 paise from its previous sessions close of 66.46.  

“I feel that the markets would stabilise in due course as India’s macro fundamentals are still strong. Even in the past, when the markets have corrected sharply due to some geo-political tensions, they have bounced back sharply tracking strong fundamentals. So I think, a sharp correction would be a good opportunity for long term investors,” said Deven Choksey, managing director, K.R. Choksey Securities.

According to Dinesh Thakkar, chairman and managing director of Angel Broking, markets are likely to remain subdued in the short term due to the escalating tension on the border and investors are expected to take a wait and watch approach. “However, it is pertinent to note that during 1999 Kargil war, markets eventually bounced back with more than 13 per cent gains during the course of the war. In my view, once the current issue also de-escalates, the markets would revert to their  fundamentals which remain strong for India,” he added. As per provisional data released by the stock exchanges,  FPIs pumped in Rs 3,413.37 crore, which experts said was largely on account of the rollover of the September derivative series.

Barring the stock of ITC, all the twenty-nine constituents in the Sensex ended the day in red.  While the shares of Adani Ports slumped over 5 per cent, the shares of Lupin, Tata Steel, GAIL, ICICI Bank and Sun Pharma suffered losses in between 3 per cent to 4 per cent.