The Sensex on Friday plunged by 260 points to close at nearly four-week low of 25,329.14, tracking global sell-off sparked by escalating geopolitical tensions after US President Barack Obama authorised targeted air strikes in Iraq.
Adding to the worry of global investors, Russian President Vladimir Putin went on retaliatory measures by banning food imports from Western countries. Russia faces sanctions imposed by the US and European countries.
Brokers said the sentiment was also hit by the rupee slumping to five-month low of 61.74 (intra-day) against the US dollar with global crude prices shooting up.
Jayant Manglik, President, Retail Distribution, Religare Securities said: “Investors were also cautious after Reserve Bank Governor Raghuram Rajan warned that global markets are at the risk of a crash due to the lingering competitive loose monetary policies being followed by the developed economies.”
After opening lower by over 180 points, the 30-share Sensex at one point was down over 350 points before ending the day at almost four week low of 25,329.14 --a level not seen since July 15--registering a steep loss of 259.87 points or 1.02 per cent.
In straight three days, the key index has plunged by 578.87 points or 2.23 per cent.
American President Barack Obama yesterday said that he has authorised targeted air strikes against militants in Iraq, key crude producer.
Rs hits 5-month low of 61.74 ends 7p up versus $
The rupee on Friday plunged by 52 paise to five-month low of 61.74 against the dollar with oil prices rising amid geopolitical tensions, but the domestic currency managed to close seven paise higher at 61.15 on suspected RBI intervention in the Forex market.
At the Interbank Foreign Exchange (Forex) market, the rupee commenced sharply lower at 61.64 a dollar from last close of 61.22 and dipped further to a low of 61.74, a fresh 5-month low, on sluggish local stocks and initial dollar demand from importers.
However, it later rebounded to a high of 61.14 before ending at 61.15, a rise of seven paise, or 0.11 per cent.
US President Barack Obama yesterday authorised targeted air strikes in Northern Iraq as well as tensions in libya and between Israel and Gaza, which weighed on the dollar and it was trading down by 0.17 per cent.
Adding to the worry of global investors, Russian President Vladimir Putin went on retaliatory measures by banning food imports from Western countries. Russia faces sanctions imposed by the US and European countries.
Exporters and some banks also sold dollars towards the fag-end. However, steep fall in domestic equities amid fresh capital outflows restricted the rupee rise to some extent.
“...By session’s close, the rupee appreciated on heavy selling of US dollars by banks and exporters.