Markets crash on war fear in Syria

Breaches 68-mark, Sensex dips 651 points

The equity markets witnessed a major sell-off and the rupee plunged sharply on Tuesday after a fresh warning by S&P about a rating downgrade amidst India’s faltering economic growth and worsening situation in West Asia, rattled investor’s sentiments. The rupee once again breached its key psychological level of 68 against the dollar, falling 3.40 per cent in the intra-day trade before closing the day at 67.63 after the Reserve Bank of India (RBI) stepped into avert a much steeper fall.

Snapping its four-day winning streak, the Sensex crashed as much as 719 points in the intra-day trade before ending the session at 18,234.66, down 651.47 points or 3.45 per cent. The Nifty slumped 209.30 points or 3.77 per cent to close the day at 5,341.45 as jittery foreign institutional investors sold shares worth `716.16 crore.

“A combination of sell-off in leading emerging market currencies and fresh jit- ters in the Middle East has driven the rupee lower. Over the near-term, fears of the US Fed tapering and tensions in Middle East could keep the domestic currency under pressure, with a risk of a major selloff beyond 69.00 levels on spot,” commented Anindya Banerjee, currency analyst, Kotak Securities.

The massive broad based selling resulted in over 1,500 stocks on the BSE ending deep in the red with almost 170 stocks hitting their 52 week lows. India’s volatility index jumped 17.93 per cent on the NSE.

“Most companies in the Nifty are trading below their 2008 lows. Only sectors like FMCG, IT and Pharma have held their fort and now even these are cracking,” noted Amar Ambani, of India Infoline.