LoC strikes: Sensex dips by 3-month-high 465 pts

Geopolitical tension got the better of the market as the Sensex plunged over 465 points  the biggest single-day fall in 3 months after India carried out “surgical strikes” on terror launchpads across the LoC.

The intra-day plunge was even higher at 573 points, but some bargain-buying at lower levels helped the index settle higher than the day’s low of 27,719.92.

The rupee too was caught in the crossfire, sharply down 39 paise against the US dollar, at 66.85.

The stocks went into a panic mode soon after the announcement that India conducted surgical strikes on terror pads across the Line of Control. However, dynamics of the September derivatives expiry ensured the spree of liquidation of bets did not lead to a free fall.

Earlier, the Sensex had hit a high of 28,475.57, in sync with a firm global trend after a surprise decision by OPEC to cut oil output for the first time in eight years to push up prices.

The Army’s announcement triggered all-round selling, sending the 30-share barometer into a tizzy, which went below the key 28,000-mark. It settled at 27,827.53, lower by 465.28 points, or 1.64 per cent  its biggest single-day fall since June 24 and weakest closing since August 26 when it closed at 27,782.25.

The 50-share NSE Nifty, which cracked below 8,600-level to hit a low of 8,558.25 during the session, managed to recover some ground and ended down 153.90 points, or 1.76 per cent, at 8,591.25.

In a tweet, Economic Affairs Secretary Shaktikanta Das said “decisive action against terrorism will spur growth and stability”.

Mood turned decidedly cautious after the Army said the surgical offensive last night came on “very specific and credible information” about Pakistan-based terrorists being pushed into Indian territory for carrying out strikes in Jammu and Kashmir and various cities in India.

The red mark was all over the place as 29 of 30 Sensex stocks slumped. Adani Ports lost most by 5.01 per cent. Sun Pharma, ICICI Bank, GAIL, Tata Steel, Lupin, Tata Motors and SBI followed. TCS manged to close in the green, up 0.46 per cent.

“As markets got first whiff of developments across the border, panic liquidation gripped the stocks enmasse, resulting in a sell-off across the board,” said Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services. Realty got the maximum battering, falling 6.31 per cent, followed by power (4.11 per cent), healthcare (3.26 per cent), metal (3.17 per cent), infrastructure (3.15 per cent) and consumer durables (2.84 per cent).

Broader markets stumbled too, with the BSE small-cap index falling 4.02 per cent and mid-cap 3.60 per cent.