Economy

Tattered Market: Sensex, Rupee Plunge after India Announces LoC Surgical Strikes

Market analysts said that the fall indicated a rise of global geopolitical risk.

People walk outside the Bombay Stock Exchange building February 10, 2011. Credit: Reuters

People walk outside the Bombay Stock Exchange building February 10, 2011. Credit: Reuters

New Delhi: India’s stock markets and currency plunged on Thursday, after Director General of Military Operations Ranbir Singh announced in a early morning press conference that the army had carried out surgical strikes aimed at terrorist camps in Pakistan.

The benchmark Sensex index slumped by over 550 points over the course of the day, before ending lower by 460 points at 27,827.53.  The dip was reflected across major sectoral indices, with the BSE Realty Index (down by 6.31%) and the BSE Power Index ( down by 4.1%) falling the most.

The rupee also witnessed its steepest fall in over months, falling 0.58% against the dollar and ending at 66.85 per dollar at the end of the day. According to market data, this was the rupee’s biggest fall since June 24th.

IIFL Executive Vice President Sanjiv Bhasin, in remarks to the media, said that today’s market fall was a general indicator of how geopolitical risk has been on the rise over the last year.  “Today’s fall in Indian equities is an indication that geo-political risk is on a rise. FIIs are likely to sell from hereon. We see the Nifty at 8,400 level and Bank Nifty at 18,500 levels next week. It is now a sell on rally market,” Sanjiv Bhasin, Executive vice president – Corporate Affairs, IIFL said