Nifty down nearly 100 points as Iraq crisis deepens

Main losers on the Sensex are BHEL, Tata Steel, NTPC, TCS and Tata Motors

Benchmark indices have extended losses and are trading near day’s low on media reports that militants have attacked Iraq's main oil refinery.

India's government sees oil prices going as high as $120 per barrel for three to four months because of fighting in Iraq, potentially driving a hole of at least 200 billion rupees ($3.4 billion) in the budget, two government sources told Reuters.

Meanwhile, brent crude held above $113 per barrel on Wednesday as heavy fighting in Iraq shut the country's biggest refinery and led to the withdrawal of staff by foreign oil firms, stoking worries about exports from the key oil producer.

At 13:05 PM, the Sensex was down 272 points at 25,249 and the Nifty was down 74 points at 7,554.

Adds Ravi Nathani, Technical analyst at Nsetoday.com, “On technical's Nifty is expected to trade in a range whereas resistance on charts is expected around 7700 and support is expected around 7500.00. As overall trend is bullish on charts therefore traders and investors best trading strategies would be hunt for opportunities to buy the Nifty heavy weights on dips as the same are expected to outperform in near & short term.”

On the global front, the dollar held firm with higher Treasury yields on Wednesday after a surprisingly high reading for U.S. inflation threatened to give a hawkish tilt to the Federal Reserve's policy outlook later in the session.

The risk was more than enough to keep most Asian share markets on the defensive with MSCI's broadest index of Asia-Pacific shares outside Japan off 0.2%. Japan's Nikkei stood out with a rise of 0.93% as a softer yen helped offset disappointing trade numbers.

Back home, all the sectoral indices are trading in red zone.

BSE Power and Realty indices have slumped by almost 2% followed by counters like Banks, Capital Goods, Oil & Gas, Metal, Consumer Durables, Auto, IT and FMCG, all falling down by 1% each.

The main losers on the Sensex are BHEL, Tata Steel, NTPC, TCS, Tata Motors, L&T, ICICI Bank and ONGC.

The broader markets have also erased early gains and are trading weak in line with benchmark indices- BSE Midcap and Smallcap indices are down over 1%.

The market breadth in BSE turns dismal with 1,688 shares declining and 1,096 shares advancing.