Market Report: Nifty Slumps To A 4 Month Low

The better industrial index of production (IIP) and improving inflation figures were not able to take the indices to another life time high level today. The Sensex today closed at 25228 down by 348 points from its previous close. This is the biggest fall since January 27 of this year. The same trend followed in Nifty as well, it closed down by 107 basis points as compared to its previous close at Rs 7542. This could be on account of profit booking taking place in different sectors. The BSE realty has seen the maximum selling pressure falling by more than 5%, while the other sectors which followed were Power, Metals, Bank, Capital Goods and Oil& Gas, which fell by around 3%.

The other reason was due to insurgency in Iraq, which is one of the largest oil producing country. The Sunni insurgents of the Islamic State of Iraq and Syria (ISIS) over ran the northern Iraqi city of Tikrit, which alone hosts a 300,000 barrel per day refinery. Due to this the brent crude oil today hit a nine month high, near USD 115 per barrel. It is at the highest level since September. This too has impacted the Indian share markets and especially oil and gas sector. Shares of refinery companies like BPCL, HPCL and IOC has slipped by around 5-8%.

The rupee has started to depreciate now. Today rupee against dollar has closed at 59.67 per dollar as against 59.25 on Thursday, down by 42 paise. As India imports around 75% of its crude oil demand and as the rupee is depreciating, this will put more pressure on the rupee.

So from the above we can say that as the investors have started to book profits and this may lead the indices to fall further in the coming days.