 "Markets fall after Syria strikes spook investors")
The Indian markets posted their biggest single-day drop on Friday in nearly two weeks after US missile strikes on Syria.
The move triggered a risk-off sentiment among global investors with stocks slipping and gold and bonds inching up. The Indian markets, however, were among the worst-performing markets on Friday, with the benchmark Sensex and Nifty dropping 0.7 per cent each.
Market players said the global developments triggered profit-booking in stocks that had seen sharp gains in recent weeks amid fears of earnings disappointment.
Reliance Industries dropped 2.3 per cent, Tata Steel fell nearly two per cent, and ICICI Bank and State Bank of India (SBI) dropped more than one per cent each. The NSE VIX index, a gauge for market volatility, rose nearly four per cent.
On Friday, foreign institutional investors (FIIs) sold shares worth around Rs 260 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 415 crore.
Despite the FII selling, the rupee closed at a 20-month high against the dollar, gaining 23 paise to end at 64.28. The rupee’s gains came a day after the Reserve Bank of India (RBI) expressed concerns over inflation.
“Unpleasant geopolitical developments are never good for markets and economies,” said Sanjay Sinha, founder, Citrus Advisors. Investors would “wait and watch” for reactions from countries related to the Syria civil unrest over the next few days before “acting decisively”, he said.
Bharti Airtel and Idea rallied nearly one per cent each after the Telecom Regulatory Authority of India asked rival Reliance Jio Infocomm to withdraw a promotional offer. Experts said the end of Jio’s promotional offer would ease pricing pressure on the industry.
Meanwhile, aviation stocks fell after the US strikes trigged a jump in crude oil prices. InterGlobe Aviation fell 1.1 per cent, Jet Airways dropped 4.5 per cent and SpiceJet declined 6.1 per cent.
Oil futures in New York and London surged more than two per cent to the highest in a month and traded near $53 a barrel. “Whether the market reaction is temporary or will continue will depend on the reactions from the international community. We can’t see that at the moment so it’s hard to digest,” said Ayako Sera, market strategist, Sumitomo Mitsui Trust Bank.
