Market Wrap: Sensex plunges 407 pts amid rising tensions between US and Iran : Podcast: Business Today
Business Today

Market Wrap: Sensex plunges 407 pts amid rising tensions between US and Iran

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June 21, 2019

Key equity indices Sensex and Nifty fell into bearish territory in Friday's trade, amid weakness in auto and real estate stocks. Sensex closed at 39,194, down by 407 points, and Nifty ended at 11,724 level, with a loss of 107 points.

As per market participants, anxiety over Sino-US trade negotiations ahead of G20 summit, and rising oil prices amid volatile situation playing out between Washington and Tehran, kept the global markets subdued.

Additionally, outcome of the first GST meet, continued foreign fund outflow, depreciating rupee amid globally mixed markets as well as pre market correction before the Budget outcome added further downplay for the domestic indices to perform and clouded the investor mood locally.

Except PSU Bank, all other indices closed in the red, with most falls registered in Pharma, Media and Auto indices, that declined over 1.40% each. Benchmark indices opened 0.4% lower with the opening bell today.

In major stock news, IndiaBulls Housing Finance received approval from CCI for the proposed merger with Lakshmi Vilas Bank, Dewan Housing Finance rose 3% after media reports suggested that the company had offloaded Rs 2,000 crore worth of debt to foreign investors. Maruti shares fell over 3% after global brokerage house UBS downgraded its rating to sell from buy.

Due to the spike in crude prices, oil marketing companies Indian Oil Corp and Bharat Petroleum Corp too, were among the top losers, shedding over 1% each.

In another major domestic event, the new FM Nirmala Sitharaman chaired her first GST meet, in which she stated that the GST Council has many more work to do including simplification of GST Rules, rationalisation of GST rates & bringing more items in the ambit of GST among others.

The Indian Rupee opened sharply lower at 69.75 against the dollar today. However, it recovered some lost ground and closed at 69.55 compared to the dollar.

Brent Crude, the global oil benchmark, rose to three-week highs and rallied about 1% today after US drone was shot down by Iran in international airspace over the Strait of Hormuz. Brent crude prices today rose to $64.66 per barrel, against Thursday's close of $64.45 per barrel, and later rose to $65 on fears of US attack on Iran.

Among international cues, Asian markets traded on a weak note today due to anxiety over Sino-US trade negotiations. Hong Kong, Nikkei, Taiwan Index traded flat-to-negative.

On Wall Street, stocks after an initial rise, dipped later in the day as rising tensions between the United States and Iran kept investors on edge.

European markets were mixed today. The FTSE 100 & CAC 40 index gained, while the DAX declined.