Rising oil, political uncertainty thrash markets; Realty down 7 per cent

30 June 2008

Bears chalo have assassinated bulls on the first day of week. It was a sharp cut across the sectors on the back of rising crude oil price, political uncertainty and institutional selling. Rate sensitive sectors like realty, banking and auto have butchered very badly. Other culprits were cement, power, capital goods and oil, which also slaughtered. Weak global indices also added to negative sentiments. The Nifty has slipped below 4050 and the Sensex below 13500, which hit April 2007 low as well.

Crude oil price has hit USD 142.76 a barrel on the NYMEX on the back of problems in Middle East countries. It is likely to cross USD 150 a barrel in few days, say experts. This will increase inflation worries across the globe. Declining US dollar is also one of the reasons for rising crude oil.

Left parties have threatened UPA government that they will withdraw support if the government goes ahead with nuclear deal. If this happens then that will be call for early elections in India.

Institutional investors also sold out some of their exposures in today's session. Nifty futures discount widened to 80 points, which added 33 lakh shares in open interest. Aggressive shorts have seen in stock futures. More than 64% of F&O stocks have negative cost of carry. Aggressive writing seen in Nifty call options.

The Sensex has hit an intraday low 13,405.54, before closing the day at 13,461.60, down 340.62 points or 2.47%. The Nifty fell 96.1 points or 2.32% at 4021.70 after touching a low of 4021.70.

Amongst frontliners, ACC plunged -9.80%, BPCL -9.67%, PNB -7.16%, ABB -7.09%, Ambuja Cements -6.83%, Grasim -6.66% and DLF -6.60% while NALCO gained 5.02%, Sun Pharma 4.45%, Sterlite Ind 3.07%, ITC 2.23%, Hindalco 1.97%, Infosys 1.59% and Jaiprakash Associates 0.84%.