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Sensex, Nifty plunge most since Brexit on Indian army’s surgical strikes across LoC

Dealers said that while the long-term India story remained attractive, in the near term, the market would closely watch for developments between India and Pakistan for further cues. Photo: Hemant Mishra/ MintPremium
Dealers said that while the long-term India story remained attractive, in the near term, the market would closely watch for developments between India and Pakistan for further cues.
Photo: Hemant Mishra/ Mint

The 30-share Sensex shed 1.64% or 465.28 points to close at 27,827.53 points; NSE's 50-share Nifty dropped 1.76% or 153.90 points to close at 8,591.25 points

Mumbai: Benchmark equity indices slumped the most on Thursday since the Brexit decision in June to their lowest close in more than a month, rattled by the Indian army’s attacks on the terrorist camps in Pakistan.

The expiry of September series derivatives contracts added to the volatility in the market.

Dealers said that while the long-term India story remained attractive, in the near term, the market would closely watch for developments between India and Pakistan for further cues.

Indian army conducted strikes along the LoC against terrorist launch pads overnight on Wednesday inflicting heavy damage, the Indian army’s director general of military operations (DGMO) Ranbir Singh said on Thursday.

The 30-share Sensex shed 1.64% or 465.28 points to close at 27,827.53 points, while National Stock Exchange’s 50-share Nifty dropped 1.76% or 153.90 points to close at 8,591.25 points. It was the biggest fall in percentage terms since 24 June, when the Brexit decision was announced.

Also read: Indian army conducts surgical strikes in Pakistan, border villages being evacuated

It was the lowest close since 26 August for Sensex and Nifty, respectively.

Market breadth was very weak, with almost six shares declining for every share that advanced on the BSE.

NSE’s Volatility index or VIX, a measure of near-term market volatility jumped 33.23%, the most since August 2015, to close at 33.23, a level last seen on 27 June.

“Panic set in the market after the news of India’s surgical attack on terror camps. This, coupled with derivatives expiry, ensured volatility and weakness in the market," said Rikesh Parikh, vice-president of equities at Motilal Oswal Financial Services Ltd.

“Investors will closely watch how developments pan out. Until then, it is difficult to predict the near-term movement in the market,"added Parikh.

Earlier in the day, Sensex shed as much as 2.02% or 572.89 points to a low of 27719.92 points, the level last seen on 29 August, while Nifty dropped as much as 2.14% or 186.90 points to 8558.25, the level last seen on same date.

“I think the panic is not warranted at this point of time. In fact, any dip would be an opportunity to buy," said Deven Choksey, group managing director at KR Choksey Investment Managers Pvt. Ltd.

All the sectoral indices closed in the red. BSE Realty Index and BSE Power Index were the worst hit, with a 5.31% and 4.11% decline. BSE mid-cap and small-cap indices fell more than the frontline index. They declined 3.60% and 4.02%, respectively

All the Sensex stocks closed lower. Adani Ports & Special Economic Zone Ltd shed the most, as it dropped 5.01%. Pharamceutical company Sun Pharmaceutical Industries Ltd, and top private sector lender ICICI Bank Ltd dropped 3.84% and 3.76%, respectively.

ICICI Prudential Life Insurance Co. Ltd shed 10.88% on its debut even after its 6,057 crore initial public offer (IPO) was subscribed 10.48 times last week.

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