Surgical strikes rattle Sensex, 465 pts down India Inc defends strikes

Risk averse investors sell stocks on Pak retaliation fears

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 `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. New Delhi, Sept. 29: India Inc on Thursday rallied behind the Army’s move to conduct surgical strikes on terror launch pads across the Line of Control and said it was time to act tough while ruling out any negative impact on the country’s economy and trade.

“Our civil n (sic) decent response in the past hasn’t been met with reciprocity so it's time to act tough,” Biocon CMD Kiran Mazumdar-Shaw tweeted.

Recalling an earlier tweet in which he had said “I trust our army. They know how to pursue & retaliate” in the wake of the Uri attack, industrialist Anand Mahindra said: “I don’t need to add anything more today...”

PHD Chamber of Commerce and Industry president Mahesh Gupta said there will be no impact on India’s trade and economy, adding that the volatility in the financial markets will also be short lived.

India’s exports to the neighbouring country worked out to $2.17 billion, or 0.83 per cent, of the total Indian outward shipments while imports were less than $500 million, or 0.13 per cent, of the total inward shipments. “The Indian economy has a strong bandwidth to deal with any possible after effects of the current state of tensions with Pakistan,” Assocham secretary general D.S. Rawat said. —