Oil shock frightens markets

Mumbai: Markets fell recording its biggest single-session drop in the last four months on Friday following escalation of violence in Iraq which may disrupt oil supplies. Sensex tanked 348.04 points to close at 25,228.17 and Nifty dropped 107.80 points to 7,542.10.

According to stock brokers, there was large scale profit booking on the exchanges with the concerns of raise in the crude oil prices in the global markets and also depreciating rupee was behind the fall in the share values. Rupee is hovering around Rs 59.78/79 against US dollar.

As per the provisional data with the bourses, the foreign institutional investors are selling about Rs 652.35 crore worth shares on Thursday. Though markets opened on a higher note taking support from favourable retail inflation and IIP data, it failed to maintain those initial gains on selling pressure on realty, power, consumer durable, metal, banking and capital goods sectors.

With the militants reaching Iraq’s capital Baghdad, the Brent crude oil hit a 9-month high near $115 a barrel, which may pose trouble the efforts of the new government to boost the economy.

Also the bears are waiting for bad news to book profits, analysts said. Although, benchmarking indices plunged record lows, the real action is seen in the small and midcap stock where as many as 488 company shares prices have raised to their fresh 52-week highs on BSE.