Japan quake, Saudi tensions drag Sensex 154 points down
Indian equity benchmarks have seen more than 0.8% drop on Friday after an earthquake in Japan, weakened the sentiment further already affected by tensions of Middle East & North Africa.
March 11, 2011 / 17:11 IST
Indian equity benchmarks saw a drop of over 0.8% on Friday after an earthquake in Japan weakened sentiment further already affected by tensions in the Middle East and North Africa. The market also shrugged off better-than-expected industrial output data.
An earthquake measuring 8.9 on the Richter Scale struck off the northeast coast of Japan on Friday, shaking buildings in the capital Tokyo. The quake triggered a 10-metre tsunami that swept away everything in its path, including houses, cars and farm buildings on fire.The Nikkei 225 average closed down 1.7% at 10,254.43 points after the earthquake struck. Among other Asian markets - Hang Seng, Kospi and Straits Times went down 1-1.5%. Shanghai and Taiwan were down over 0.7%.Tsunami warning has widened to include rest of Pacific coast, including Australia and South America, after massive earthquake in Japan. India Tsunami Centre says there are no local alerts yet in wake of Japanese quake.Deven Choksey, KR Choksey Securities said that the crisis may not have a direct impact on the Indian economy and business. However, the Japanese crisis may have a far reaching effect on Indian auto components company."Commodities may get affected as crude prices will come down. Sectors like insurance and auto will face disruptions," Choksey.The 30-share BSE Sensex settled down 0.84% at 18,174.09 points and the 50-share NSE Nifty fell 0.89% to close at 5,445.45. The BSE Midcap and Smallcap indices slipped one percent each.For the week, the Sensex and Nifty tanked 1.7% each.London Brent crude fell below the USD 114 a barrel today as a quiet start to the planned day of rage in Saudi Arabia eased concerns that the unrest would spread in the world's top oil exporter.Crude oil was trading at USD 101.55, down 1.12% on the NYMEX and London Brent crude declined USD 1.45 at USD 113.98 a barrel.Oil prices remain the biggest risk in the market, says Dipan Mehta, Member, BSE & NSE. "It's not just the earthquake in Japan but today is an important day from point of view of oil prices given that this is the day of rage in Saudi Arabia. And again, we are seeing some mini crisis coming up in Europe as well and last night in US we had the first few data points which were negative that being the trade deficit of the US government and also the unemployment numbers."Saudi Arabia's capital was quiet on Friday ahead of a planned day of demonstrations that will test whether activists calling for reform online will succeed in taking their protests to the streets. Police fired in the air to disperse protesting Shi'ites on Thursday, and three people were injured in the melee.However, the markets ignored the Index of Industrial Production (IIP) data. The Index for Industrial Production (IIP) has come in at 3.7% for January, much higher than street estimates. According to a CNBC-TV18 poll, industrial output was estimated to be at 2.7% (YoY).The capital goods sector has hugely disappointed with a degrowth of (-) 18.6% versus 57.9% (YoY). However, surprises came in from electricity sector which saw an annual growth at 10.5% against 5.6%. Consumer non-durable goods grew at 6.9% (YoY) compared to (-)7%.Siddhartha Sanyal, Chief India Economist, Barclays Capital said,
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