Indo-Pak tensions drag Sensex 465pts, Nifty below 8600 on expiry

Moneycontrol Bureau

The market butchered on the day of F&O expiry, posting the biggest one-day fall in last three months Thursday as investors opted for profit booking due to elevated geopolitical tensions at India and Pakistan border. However, benchmark indices were higher in morning trade following a rally in global peers that outperformed India after surge in oil prices on OPEC meet. The market posted higher ever turnover of Rs 11.5 lakh crore.

The 30-share BSE Sensex crashed 573 points intraday and ended below the psychological 28000 level. The index closed at 27827.53, down 465.28 points or 1.64 percent.

The 50-share NSE Nifty ended below 8600 level for the first time since August 26. It hit an intraday low of 8558.25, before closing down 153.90 points or 1.76 percent at 8591.25.However, foreign institutional investors as well as domestic insitutional investors were net buyers amid market correction. FIIs net bought Rs 3,413.37 crore and DIIs Rs 1,630.88 crore worth of shares, as per the provisional data available on exchanges.

The director general of military operations announced today afternoon that the Indian army had conducted surgical strike at terror launch pads in response to militant attack on September 18 in Uri town of Kashmir.

The operation took place on Wednesday night and is now over, Director General of Military Operations Lt General Ranbir Singh said.

India's surgical strike across the Line of Control was well planned and well-coordinated. It was long called for, Niti Aayog Chief Amitabh Kant says, adding foreign investors have nothing to fear and should not feel nervous.

Market experts did not look too worried about today's sell-off, saying this is a panic selling. They advised staggered buying in quality stocks on such correction for long term as India's fundamentals are strong.Also read - All eyes on OPEC's Nov meet; expect floor for crude: Platts

Sanjay Dutt of Quantum Securities says although the geopolitical risk is disconcerting, he does not think the military situation would go out of control.

India's fundamental story does not change even if there is a 15-20 days conflict, he feels.

Reaction of the currency market has not been as volatile as the equity, Robert Parker of Credit Suisse says adding he has a positive stance on the Indian economy and sees the country maintaining a 7.5 percent growth rate.

Credit Suisse is underweight on Indian equities, saying the country is one of the four most overvalued markets along with Indonesia, the Philippines and Malaysia.

Meanwhile, the rupee was down 39 paise at 66.85 to the dollar, the lowest level since September 21. Hopes of rate cut in October policy reduced as bond yields hardened.

In September series, benchmark indices as well as broader markets closed flat.

The broader markets too felt the heat today, falling more than benchmarks. The Nifty Midcap slipped nearly 4 percent, the biggest one-day fall in last 13 months.

All sectoral indices closed in the red with the Nifty Bank losing 2.4 percent, the biggest one-day loss in last three months.

Country's largest private sector lender ICICI Bank was the top contributor to Sensex's fall, down 3.76 percent due to dented market sentiment as well as subdued listing of insurance subsidiary.

ICICI Prudential Life Insurance crashed 11 percent on debut to close at Rs 297.55 against issue price of Rs 334 per share. It lost market capitalisation of more than Rs 5,000 crore in a single day.

Lupin trimmed its losses to 3.1 percent from 4 percent in late trade, especially after the pharma major received approval from the USFDA for generic Namenda XR capsules that is used for treatment of dementia of alzheimer's type.

Zee Entertainment gained 0.3 percent on the NSE after the media company acquired radio station Hum 106.2 FM from Shamal Media Services in UAE.

BHEL was the biggest loser, down 7.4 percent followed by Adani Ports, Sun Pharma, SBI, HDFC, HDFC Bank, Tata Motors and Reliance Industries with 1-5 percent loss whereas TCS (up 0.46 percent) and Bharti Infratel (up 2.36 percent) outperformed.

About five shares declined for every share falling on the Bombay Stock Exchange.

However, global markets were strong today as investor sentiment was buoyed by a surge in the oil price after major oil producers agreed to cut production levels. European markets - France's CAC, Germany's DAX and Britain's FTSE - were up 1 percent each at the time of writing this article. Asia closed higher with the Japan's Nikkei rising 1.4 percent.