Sensex tumbles 546 pts on worries over oil prices, inflation

Written by: Pti
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Mumbai, Feb 24 (PTI) In the steepest single day fall in18 months, Sensex plunged 546 points to 17,632.41 as investorsdumped stocks on concerns over shooting oil prices due tounrest in the Middle East and inflationary pressures.

Besides, worries over widening current account deficit,rising interest rates and the expiry of monthly derivativescontracts worsened the sentiment.

Sensex and Nifty lost about 3.0 per cent to end the dayat nearly 2-week lows.

Continuing political turmoil in Libya and the Middle Easthas led to investor worries over global economic recovery inview of rising crude oil prices, sending stock markets on asteep slide.

Brent North Sea crude oil hit 29-month high yesterday tonearly USD 120 a barrel, and the light sweet crude for Aprildeliveries to above USD 100 mark in New York.

India imports nearly 70 per cent of its oil requirements.

Markemen were concerned that rising oil prices might force RBIto further hike policy rates, pushing up already high interestrates, affecting the bottomline of the companies.

"Market sentiment appears to be extremely fragile amidconcerns that the simmering political tensions in theMiddle-East and North African would lift crude oil pricesfurther. Any spike in oil prices is bad for the Indian economyas it will adversely affect the already high current accountgap," said IIFL Head of Research Amar Ambani.

Besides, rise in food inflation to 11.49 per cent for theweek ended February 12, from 11.05 per cent in the previousweek, added to investor apprehensions.

Selling was seen across-the-spectrum with banking,consumer durable, capital goods, auto, realty and metal stockswere at the receiving end. All the 13 indices ended in the redbetween 1.86 per cent and 3.97 per cent.

The Bombay Stock Exchange 30-share barometer Sensexopened weak and gradually moved downwards to settle the day at17,632.41, a steep fall of 545.92 points or 3.00 per cent.

Previously, it had recorded the biggest fall of 626.71 pointsin absolute terms after August 17, 2009.

"Markets cracked on the final day of February expiry.

Rising Crude oil price due to the unrest in West Asiancountries along with the uncertainty over union budget led toselling across the sectors. Indian markets witnessed largestdaily fall since August 2009," said Motilal Oswal SecuritiesManager

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