After a positive opening on the back of a rise in global crude oil prices, key Indian equity indices took a sharp fall on Thursday afternoon, after the Indian Army said it had carried out surgical strikes on terror launch pads across the Line of Control (LoC) in Jammu and Kashmir, inflicting "significant casualties".A roller-coaster ride of indices thereafter also saw some of them recovering, albeit marginally, but only to fall again and close significantly lower. The market movement was similar in Pakistan.The barometer 30-scrip sensitive index (Sensex) of the BSE opened strong at 28,423.14 points on Thursday, against the previous close at 28,292.81 points. By the time the news briefing by the Indian Army ended, the intra-day fall was as much as 750 points.After a subsequent volatile session, where some investors were also resorting to value buying amid overall concern over escalation in tension between India and Pakistan, the key index ended with a loss of 465.28 points, or a 1.64 per cent drop, at 27,827.53 points.But for Tata Consultancy Services (TCS), all the 30 Sensex shares ended in the red.The BSE market breadth fell prey to the bears -- with 2,350 declines and 411 advances.
At the Karachi Stock Exchange, the movement for KSE-30 was similar. The index, at one point of time, was down by over 415 points. It closed lower by 59.50 points, or 0.15 per cent. India's National Stock Exchange (NSE), too, closed lower by 153.90 points, or 1.76 per cent, to 8,591.25 points.The market mood took a beating as soon as the briefing by the Indian Army started."India cannot allow terrorists to operate across the LoC (Line of Control) and strike with impunity," Director General of Military Operations Lt Gen Ranbir Singh told a hurriedly called press briefing in New Delhi, soon after a meeting of the Cabinet Committee on Security."The strikes were carried out based on specific and credible information," he said.Initially on Thursday, the benchmark indices opened higher following positive global indices on the back of higher crude oil prices.owever, the indices took a sharp fall after the announcement of the surgical strikes by the Indian Army.
Although some value buying arrested the steep falls and led to a bounce back, speculative selling and profit booking again dragged the key indices lower during the late-afternoon session.Amid investors' concerns over escalation in tension between India and Pakistan, the F&O (futures and options) expiry, too, kept stocks volatile, and Nifty VIX, a measure of volatility, rose by almost 35 per cent to 18.29.The Indian rupee depreciated by 39 paise to 66.85 against a US dollar from its previous close of 66.46 to a greenback."Indian rupee along with Indian bonds and Indian equities made a knee-jerk reaction as markets digested the news of India's surgical strikes against terrorist camps," Anindya Banerjee, Associate Vice President for Currency Derivatives with Kotak Securities, told IANS."Rupee weakened towards 66.92 from 66.40 levels. However, intervention from the central bank contained the slide. We hope the geopolitical situation is contained."Banerjee predicted a near term range of 66.40-67.20."Indian markets had risen earlier in the day after OPEC's (Organization of the Petroleum Exporting Countries) decision to cut production," said Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services.
"However, consecutive days' rise had rendered the stocks ripe for profit booking, and the falls thereof assumed a feverish pitch on news of escalation of Indo-Pak tensions."According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the CNX Nifty traded with bearish sentiments throughout the session."Firm USD/INR futures prices also pressurised the Indian equity markets in intra-day session. Selling pressure was witnessed across almost all sectors in Indian markets," Desai said.In terms of investments, provisional data with exchanges showed that the foreign institutional investors (FIIs) purchased stocks worth Rs 3,413.37 crore, whereas the domestic institutional investors (DIIs) bought scrip worth Rs 1,630.88 crore.All the 19 sub-indices of the BSE witnessed heavy selling pressure. The S&P BSE banking index plunged by 546.30 points, followed by the healthcare index, which declined by 541.94 points, and the automobile index which slipped by 484.97 points.Of the 30 shares that comprise the Sensex, TCS was the sole gainer, up 0.46 per cent at Rs 2,434.60.Major Sensex losers during Thursday's trade were: Adani Ports, down 5.01 per cent at Rs 256.95; Sun Pharmaceuticals, down 3.84 per cent at Rs 737.05; ICICI Bank, down 3.76 per cent at Rs 251; Gail, down 3.19 per cent at Rs 362.95; and Tata Steel, down 3.15 per cent at Rs 367.85.