MUMBAI: The escalating war in West Asia took a heavy toll on investors on Dalal Street as stocks plunged on Monday, leaving them poorer by Rs 6.6 lakh crore. With the war between the United States, Israel and Iran raising geopolitical risks, the sensex closed 1,048 points (1.3%) lower at 80,239 points, a closing level not seen in almost six months.The day’s session began with the sensex falling almost 3,000 points, in a knee-jerk reaction to the combined US-Israeli attack on Iran on Saturday morning. But buying at lower levels soon emerged and the index recovered some of the initial losses.At the end of a choppy session that saw the NSE Volatility Index (VIX) jump 25%, the sensex’s close was well above the intraday low of 78,544 points. Nifty on NSE followed a similar path to close 313 points (1.2%) lower at 24,866 points. The sharp rally in the VIX, also called the fear index, indicates increased uncertainty and risk aversion among market participants, market players said.
Foreign funds led the selling with a net outflow on the day of nearly Rs 3,300 crore, BSE data showed. The day’s fall in share prices poored investors by Rs 6.6 lakh crore and the BSE’s market capitalization now stands at Rs 456.9 crore, official data showed.According to Vinod Nair, head of research at Geojit Investments, rising geopolitical tensions in West Asia have disrupted global markets, with concerns over a possible extension of the situation given the assassination of Iran’s supreme leader. “Rising crude oil prices and weakening (of the rupee) reflect concerns about potential disruptions in oil supplies, which could increase inflationary pressures in India and hit public finances and strain margins in the energy and chemical-dependent sectors.“On Monday, most markets around the world fell, starting with Asia. At the close, Japan’s Nikkei was down 1.4% while Hong Kong’s Hang Seng closed down 2.1%. Shanghai, China, however, bucked the trend and closed up 0.5%. In Europe, the UK’s FTSE was down 1.3% in late trading, while Germany’s Dax was trading 2.6% lower.Of the 30 sensex stocks, 27 closed in the red. Among them, L&T and RIL contributed the most to the decline in the sensex. Only BEL, Sun Pharma and ITC closed with profits.Oil marketing companies were among the most affected. Indian Oil closed down 4.5%, Petronet LNG down 4.4% and Adani Total Gas down 3.7%. Crude oil producers Oil India and ONGC closed higher. The BSE Oil and Gas Index was down 2.3%.
