INSUBCONTINENT EXCLUSIVE:
to cap their worst weekly performance in more than two years.
A deepening conflict in West Asia triggered risk-off bets from global
investors and raised the risk of a runup in oil prices.Click here to connect with us on WhatsApp
The markets also came under pressure on
concerns over foreign portfolio investors (FPIs) pulling out from India to invest in China, where valuations are attractive.
The Sensex
Sensex declined 1 per cent, or 809 points, to settle at 81,689.
The Nifty also dropped 0.9 per cent, or 236 points, to end at 25,015
cent this week, buoyed by the aggressive stimulus measures by the central government to boost its economy.
The rising tensions between
bills.
Tensions between Israel and Iran's proxies in Lebanon, Gaza and Yemen have been brewing for a while, but Iran's direct missile
attack this week on Israel has stoked fears of the tensions snowballing into a full-blown conflict.
Some estimates suggest that if Israel
were to mount a serious offensive against Iran's oil facilities, it would take 1.5 million barrels of daily supply off the
market.
Investors are also worried that if such an event happens, Iran may block the Strait of Hormuz, a critical sea trading route
through which more than a third of the global crude oil supply passes
Brent crude rose 11.6 per cent in the last six sessions and was trading at $79.1 per barrel.
"Depending on what Israel does, the fear
globally is that they might target Iran's oil assets, and if Iran retaliates by blocking key sea routes, the cumulative effect would be oil
spiralling to $100 a barrel
It affects inflation globally, and India would be disproportionately affected by our import bill
India has always been overbought, and now it's just nervousness due to adverse news flows," said Andrew Holland, CEO of Avendus Capital
Public Market Alternate Strategies.
The market breadth was weak, with 2,387 stocks declining and 1,563 advancing
HDFC Bank, which fell 1.5 per cent, and Reliance Industries (RIL), declining 1.5 per cent, were the biggest contributors to Sensex's losses
in the near term amidst rising crude prices, and fund flows to cheaper markets like China," said Vinod Nair, head of research of Geojit
Financial Services.
FPIs were the net sellers of Rs 9,897 crore on Friday, while domestic institutions bought shares worth Rs 8,905
crore.
FPIs were the net sellers of equities worth Rs 37,088 crore this week, and domestic institutions bought shares worth Rs 33 074
On a five-day rolling basis, FPI selling is the highest in 24 years.First Published: Oct 05 2024 | 12:01 AMIST
