Financial Daily from THE HINDU group of publications
Saturday, Sep 07, 2002
Markets - Stock Markets
Markets turn jittery
MUMBAI, Sept. 6
GROWING fears of a US military attack on Iraq rattled stocks, currency and bond markets on Friday.
While the rupee lost 11 paise against the dollar, bond prices ended the day 20-30 paise lower from Thursday's's close.
Dealers said the crucial meeting of the Cabinet Commitee on Disinvestment scheduled for Saturday was another factor that pulled the benchmark Sensex down by over 40 points.
In the local bullion market, gold prices moved up by Rs 40 per 10gm and silver by Rs 30 per kg.
Reacting to the West Asia developments, international oil prices soared to their highest level in a year. The Benchmark Brent crude oil jumped by 59 cents to touch $28.25 per bbl on Friday evening.
In the forex market, the rupee closed at 48.5925/60 against the dollar as compared to Thursday's close of 48.48.
With "the biggest attack on Iraq in four years'' oil companies were buying dollars to tackle the spike in Brent oil prices, dealers said. They were trying to "hedge'' their positions in the forex market, as early as possible. The six-month forward premia on dollar closed higher at 4.08 per cent (3.99 per cent) and the twelve month premium closed at 4.05 per cent (3.92 per cent).
Demand for forward premia shot up with importers and corporates buying forward dollars in significant volumes, said a dealer.
In the bond market, the benchmark ten year paper - the 7.40 per cent 2012 paper - opened lower at Rs 101.70 from yesterday's close of Rs 101.85/90 and touched an intra-day low of Rs 101.48/50 to close at Rs 101.54/55.
The long-term 8.07 per cent 2017 paper opened lower at Rs 105.40 from the previous close of Rs 105.55/60, touched an intra-day low of Rs 105.20 and later recovered to Rs 105.35.
At close, the BSE sensex ended 40.36 points lower at 3,141.11. On NSE, S&P CNX Nifty also closed below the psychological 1,000 mark. After opening at 1008.45, the index touched low of 992.70 and closed at 995.20, down 13.4 points.
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