Sensex takes 465-point hit after surgical strikes

Tribune News Service

New Delhi, September 29

Even as stock markets tanked following India launching surgical strikes against terrorist camps across the LoC, the government today said decisive action against terrorism will spur growth and stability in the economy.

The benchmark Sensex plunged sharply by over 465 points, the biggest single-day fall in three months, after India carried out "surgical strikes" last night on terror launch pads across the LoC.

The BSE Sensex plummeted 465.28 points to close at 27,827 points while NSE's Nifty nosedived 153.90 points to 8,591 points.

The rupee too was hurt, down 49 paise during intra-day trade against the US dollar, to trade at 66.95. Later it finally closed at 66.85, down 39 paise.

The government said action against terrorism will boost growth and stability. "Terrorism (is the) biggest threat to our financial and economic stability and growth. Decisive action against terrorism will spur growth and stability," Economic Affairs Secretary Shaktikanta Das said in a tweet following the strikes.

He also expressed the hope that currency and stock markets will stabilise in the next few days.

World markets, however, cheered the surprise deal cut by OPEC to slash oil output for the first time in eight years.

Experts said markets may remain under pressure over uncertainty about the geopolitical situation. Dinesh Thakkar, CMD, Angel Broking, said Indian markets saw a selling pressure on the news that the Indian Army conducted surgical strikes on terror launch pads at the LoC yesterday. Both S&P Sensex and Nifty corrected more than 2% as soon as official press briefing started.

“Markets may remain under pressure over uncertainty about geopolitical situation between two countries and take wait and watch approach in the short term”, he added.

He said it is pertinent to note that during 1999 Kargil war, markets eventually bounced back with more than 13% gains between the start to the end of the war. “In my view, once the current issue also de-escalates, the markets will revert back to its fundamentals which remain strong for India,” he said.

Kunj Bansal, ED & CIO, Centrum Wealth Management, said after moving up by almost 30% in the past six months, market had been looking for some reasons to take a correction. On economic parameters, no negatives had been visible so market seems to have taken recourse to a non-economic reason to take a correction.