The Hindu Business Line : London blasts rock markets — Sensex down 142 points, Re hits 3-week low

The markets opened weak on a note of correction and rising crude oil prices, but by 2 p.m., when news of the series of blasts in London underground trains trickled in, some panic selling led to a near 2 per cent loss in the benchmark indices.

The Sensex shed 142.47 points to close at 7,145.13, registering a 1.95 per cent loss from Wednesday's close. The Nifty lost 2.19 per cent on a 54.8-point loss and closed at 2,179.40.

The blast also had its impact on the rupee, which fell to its three-week low at 43.6488 against the US dollar.

The impact of the London blasts was felt in most major financial markets globally.

Asian markets including Japan, Hong Kong, Singapore, and Taiwan ended the day in the red.

European markets opened weak, with London's FTSE shedding over 2.16 per cent by noon.

Analysts are predicting a weak opening for the US markets as well. Both Dow Jones and Nasdaq futures were down on the basis of poor sentiment because of the blasts.

Concerns in the Indian markets revolved around reduction of inflows from FIIs as a fallout of the events in London.

Analysts also said that Thursday's move in the markets was more emotional than fundamental.

"Though liquidity could get affected, it is not likely to be a long-term trend," said a market analyst.

Global oil prices were a concern as markets opened for trade. Crude oil prices had exceeded $61 per barrel, and this was seen as a negative trigger for the markets on opening.

Oil-based stocks, including ONGC and Reliance Industries Ltd, witnessed drop in share prices.

ONGC lost Rs 45.45 to close at Rs 929.35, a depreciation of 4.66 per cent from Wednesday's close.

Reliance Industries also posted a 4.84 per cent loss today, closing at Rs 613.85, down by Rs 31.25.

As the domestic bourses have had a strong bull run for the last eight weeks, there are indications that the markets might use this opportunity to build in some correction.

Market participants said that in the short term, the indices could shed some more steam.

Dealers said that FIIs were heavy sellers in the last hour of trade.

"Several investors have booked profits today. Today's events would definitely be a speed-breaker on the kind of bull run we have witnessed over the last few weeks," said the Chief Investment Officer of a large domestic fund house.

"Fundamentally not much has changed: the political and economic repercussions of today's events in London will have to be evaluated before we can take a long-term fundamental call."

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