War, HDFC Bank churn rattle mkts, sensex tanks 2.5k points

MUMBAI: Stocks sold off on Thursday as the war in West Asia took a turn towards destruction of important energy assets around the Persian Gulf, one of the world's most important regions for production and supply of crude oil, natural gas and several other minerals and gases.

This led to a sharp spike in prices of crude oil and natural gas, and also raised supply concerns for govt and policymakers as both the energy sources are important for keeping the Indian economy well-oiled.

The jump in prices of crude oil-the single-biggest important item for India-to over $115/barrel could also severely distort the economic fundamentals of the country.

In addition, the abrupt resignation of HDFC Bank's non-executive chairman Atanu Chakraborty on Wednesday night, added to the already fragile investor sentiment on Dalal Street to pull down the sensex by 2,497 points (3.3%) to 74,207 points. This was the sixth-biggest single-session loss in the index ever.

As the war in West Asia took a turn for the worse, the day's session started with the sensex deep in the red. It slid through the session to hit an intra-day low at 73,951 points - an 11-month low level - and closed a tad higher from that level. The day's slide also reversed a three-session gaining run for the index and more than wiped-off about 2,100 points that the sensex had added during that period.

The day's session also wiped out nearly Rs 13 lakh crore worth of investors' wealth with India's market capitalisation now at Rs 425.8 lakh crore, a level not seen since last May, BSE data showed.

According to Vinod Nair of Geojit Investments, the domestic market ended sharply lower as a series of attacks on energy infrastructure in West Asia triggered a renewed spike in oil prices and dampened investor sentiment. The Fed's decision to hold rates too had an impact.

Meanwhile, in the non-deliverable market for foreign exchange the rupee fell to a level below the 93-to-the-dollar mark, an all-time low. The local inter-bank market for forex was closed for trading.

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