The Hindu Business Line : Market melts on FII selling, oil price surge

Heavy selling by foreign investors for two consecutive days amidst weak global markets saw Indian equity markets entering the negative territory. The surge in crude oil prices raising concerns over inflation acceleration drove equity markets down. FIIs were net sellers to the tune of Rs 669.87 crore for Monday, according to provisional data on NSE leading to a huge fall in share prices. They were also net sellers to the tune of Rs 343.60 crore for Friday.

The Bellwether BSE Sensex ended 385 points down (3.61 per cent) at 10,293.22 points. All the sectoral indices lost over 2 per cent to end in red. BSE PSU index was the biggest loser, down 4.59 per cent at 4,688.56 points.

"Crude oil price is expected to rise substantially due to the Middle East crisis, which has impacted the markets. Volumes have also been very thin," said Mr Shailesh Shah, broker with Rapid Capital Services.

The NSE S&P CNX Nifty ended at 3007.55 points, down by 3.71 per cent.

There are concerns that RBI will review its inflation targets in its meeting on monetary policy on July 25. This might lead to a rise in interest rates.

The overall market breadth was overwhelmingly negative with 680 gainers and 1,711 losers while shares were traded for Rs 2,612.90 crore at the BSE.

The rupee touched a three-year low of 46.75 as oil prices continued to rule firm due to the political crisis in West Asia. This led to a strong dollar demand and the greenback strengthened against all major currencies. On Monday, the rupee opened weak at 46.46/48 and touched an intra-day low of 46.78 to finally end trade at 46.75 about 35 paise lower than the earlier close of 46.38.

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