Sensex dives 465 points on LoC turmoil; Nifty below 8,650

By Abhinav Kaul

NEW DELHI: Rising tension on the India-Pakistan borders shook up Dalal Street on Thursday, sending the domestic equity market helter-skelter.

The benchmark BSE Sensex crashed 463 points, while NSE benchmark Nifty50 tanked below the 8,700 mark, as investors braced for potential escalation in geopolitical tension after the Indian Army claimed to have carried out some surgical strikes across the LOC to neutralise terrorists.

The BSE Sensex nosedived 465 points, or 1.64 per cent, to 27,827, while the Nifty50 tanked 153 points, or 1.76 per cent, to end the day at 8,591. This was the biggest single-day loss for both the indices in three months.

The plunge came at a time when many analysts on Dalal Street were raising eyebrows over the premium that many of the stocks were quoting at following the recent market rally.

Smallcap and midcap stocks were hit the hardest. The BSE Midcap index plunged 477 points, or 3.56 per cent, with 78 out of 82 scrips ending the day in the red. In the smallcap segment, 737 out of a total 782 stocks took the plunge.

Tirthankar Patnaik, India Strategist at Mizuho Bank, said besides the geopolitical tension, the F&O expiry also contributed to the fall. “Markets are probably right and today being the last day of the expiry, the volatility has been accentuated,” he said.
In the currency market, the rupee weakened to a one-week low of 66.91 in intra-day trade, marking the worst fall for the domestic unit since the Brexit vote in June.

Some market experts said the market crash has created opportunity for long-term investors to enter the market.

Nilesh Shah, MD of Kotak Mutual Fund, for one, said the market crash was not going to impact long-term investors. “Thursday’s market crash is not going to impact long-term investors. On the contrary, investors should use the dips to enter the market,” he said.

Nitasha Shankar, Senior Vice President and Head of Research, YES Securities, said from a fundamental perspective, the market is still attractive for long-term investors.

“Therefore, such dips present good buying opportunity, which is visible in the recovery from the day’s lows. Escalation in geopolitical tension was the reason behind Thursday’s fall,” she said.

ICICI Prudential Life Insurance, who has a rather disappointing debut on the bourses on Thursday, slumped 11 per cent in an extremely fragile trading session to end the day with listing losses. The stock plunged 10.88 per cent or Rs 36.35 from the issue price to settle at Rs 297.65 on BSE. On NSE, the scrip ended at Rs 296.45, down 10.17 per cent.