Markets down 2% over Libya unrest, oil prices

Markets down 2% over Libya unrest, oil prices


Mumbai: Shares extended losses to 2% on Thursday afternoon, joining the slide in world markets, as investors were nervous due to the unrest in Libya and contagion fears.

At 1:26pm, the 30-share BSE index was down 2.01% at 17,812.28 points, with 26 components declining. The 50-share NSE index was down 2.1% at 5,323.10.

Shares shed 1.2% at opening amid weak Asian peers as unrest in Libya sent crude prices up, fuelling fears it could spread to other oil producing nations, choke supplies, and hamper global economic growth.

Mood was also cautious ahead of monthly derivatives contracts expiry later in the day on the National Stock Exchange.

Financials traded lower, with weekly food and fuel inflation data due at around 11:00am, grabbing the market’s focus.

By 10:45am, the 30-share BSE index was trading down 1.16% at 17,967.05 points, with 25 of its components declining. The 50-share NSE index was down 1.2% at 5,372.85 points.

“The crisis in mid-east is not something which will get over tomorrow. It is in fact, picking up steam," said Arun Kejriwal, director of research firm KRIS.

“Let us see what comes up at the budget. It is a tightrope walk for the FM (finance minister) between containing inflation and managing growth," he said referring to the federal budget, which will be presented in parliament on Monday.

Oil prices hit a fresh 2-year peak on concern the bloody unrest in OPEC-member Libya could spread to other major producers in the region including Saudi Arabia.

Top lender State Bank of India was down 0.4% while leading private lenders ICICI Bank and HDFC Bank were down 1.2% and 0.6% respectively.

The two private lenders raised their benchmark lending rates by 50 basis points and 45 basis points, leading to concerns the move may dent demand for loans.

Leading outsourcers Tata Consultancy Services and Infosys Technologies were down 0.8% and 1.4% respectively, while Wipro bucked the trend and rose 0.3%.

“Software stocks are being bothered by the fact that IT spending could be hurt going forward, if the crisis goes on to hurt global economic growth."

In the broader market, losers were more than double the number of gainers, in a volume of 62 million shares.

The MSCI’s measure of Asian markets other than Japan was down 0.4%, while Japan’s Nikkei was trading 0.9% lower.


Aurobindo Pharma extended losses and were down nearly 13.9% to 176.50, after US FDA banned imports from its unit that makes cephalosporin injectables and orals. It was the top traded stock on BSE and NSE.

Oil explorer Cairn India was up 0.9% to 329.95 on firm international crude oil prices.