Crude shock to stocks

Mkts nosedive on geopolitical fears; BSE m-cap fall below `100 lakh cr

Mumbai: With Saudi Arabia raising its onslaught in Yemen, the Indian stock markets tumbled for the seventh consecutive session on Thursday, in tune with the weak global cues. The rising tension in the Middle East region has prompted the investors to be cautious, amid expiry of the monthly derivative contracts.

Investors are worried as the Arab nations have combined their effort led by Saudi Arabia in Yemen to push back Houthi rebels.The action led to zooming oil prices to 6 per cent higher, to $59.70 a barrel. At close, on Thursday, the markets fell over 2 per cent, with Sensex down 654 points, lower at 27,457, while Nifty fell 188 points to end at 8,342. The market capitalisation of all the BSE traded stocks fall bellow Rs 100 lakh crore mark. In the broader markets, midcap index down 0.8 per cent and Small cal down by 1 per cent.Experts say the market may be expected to correct another 2 to 3 per cent in the next couple of weeks. While most of the sectoral indices fall led by banks, metals and IT indices.

The markets hit with losses due to sharp selloff in banking and information technology, metal and pharmaceutical counters. Analysts fear that the market would continue to react to the external reasons as there is no sizable trigger for the markets domestically.Coming to oil and power sectors, the PM led Cabinet Committee of Economic Affairs has approved the use of re-gasified LNG to commence stalled gas based power projects, hence gas and power companies like GAIL and RelPower will be benefited.

The gainers: Bharti Airtel, up 0.98 per cent at Rs 398.70; GAIL, up 0.45 per cent at Rs 381.80; Hero MotoCorp, up 0.29 per cent at Rs 2,603; and Larsen and Toubro (L&T), up 0.18 per cent at Rs 1,636.The losers: HDFC, down 5.32 per cent at Rs 1,283.20; Wipro, down 4.01 per cent at Rs 633.90; Sesa Sterlite, down 3.90 per cent at Rs 188.55; Infosys, down 3.30 per cent at Rs 2,144.45; and State Bank of India (SBI), down 3.18 per cent at Rs 256.90.

Power, gas stocks gain on Cabinet nod for fin support

Mumbai (PTI): Shares of power and gas utility stocks rose as much as 5% on bourses after Cabinet approved financial support to revive stranded power projects.In a bid to revive Rs 60,000 crore of stranded power projects, the Cabinet approved financial support to private companies. Among power generation companies, Torrent Power settled for the day with gains of 3.23%. Similar movement was seen in the GVK Power & Infrastructure counter also which ended the day up 2.43%.Among gas utilities and distribution companies, Gail (India) gained up 0.45%, Petronet LNG was up by 1.28%, Gujarat State Petronet up 4.70% and Indraprastha Gas up 0.96%.

Outlook for friday Midsession better

Yemen crisis and derivative expiry together contributed to the massive fall on Nifty which fell by more than 2% and the derivative series closed at the lowest level. Nifty needs to close above 8525 to get out of the current bearishness. Nifty is below 100 DMA and needs to go above that level to regain stability. Nifty spot is expected to encounter resistance at 8390, 8430 and find support at 8310, 8275 for Friday. While global cues and funds flow are expected to guide the market based on the present position. Market may be expected to recover from lower levels particularly during midsession. As new derivative series are to commence, semblance of optimism can be expected.

Dr B Amaranatha Sastry