North Korea scare makes Sensex, Nifty tank again

Ivan Schwartz
September 24, 2017

Key Indian equity indices on Friday witnessed the steepest fall since November 2016, on the back of escalating geo-political tensions between North Korea and the U.S., a weak rupee and heavy selling pressure in capital goods, metal and banking stocks.

A likely USA rate hike can potentially drive away foreign portfolio investors (FPIs) from emerging markets such as India. The Nikkei 225 index lost 0.25 percent, or 51.03 points, to close at 20,296.45, while the broader Topix index also ended down 0.25 percent, or 4.13 points, at 1,664.61. While the Sensex lost over 300 points to trade at an intra-day low of 32,023.37, the Nifty went below the 10,000 psychological barrier to trade at an intra-day low of 9,992.15.

The rupee fell to a four-month low in early trade on the back of heavy capital outflows over expectations of a rate hike by the US Federal Reserve.

Besides, investors remained cautious about the government's plans for a stimulus programme which might lead to fiscal deficit.

The Sensex and Nifty fell on Friday following nervousness in global markets as investors turned cautious following new USA sanctions targeting North Korea and a China credit rating downgrade.

Indian shares fell 1 per cent on Friday, while the rupee hit its weakest point since early April amid concerns that the government's plan for a stimulus to halt an economic slowdown may have a negative impact on the fiscal deficit.

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North Korea said on Friday it might test a hydrogen bomb over the Pacific Ocean after US President Donald Trump said he would destroy the country if it threatened the United States or its allies.

This is also the weakest closing since September 11 when the index had come in at 31,882.16.

BSE realty melted the most by 4.29 per cent.

There was no let-up in foreign selling as FPIs sold shares worth Rs 1,204.95 crore while domestic institutional investors (DIIs) bought equities worth a net Rs 1,416.55 crore on Thursday, as per provisional data.

Sun Pharma, Cipla, Wipro and HCL Tech were the major gainers while Hindalco, Yes Bank, ICICI Bank and Coal India were the major losers.

Other reports by GizPress

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