Indian stocks tumbled on Tuesday tracking sharp losses across global markets. The Sensex slumped over 600 points, while the 50-share Nifty breached the 8,200 mark, dropping nearly 180 points.
Anil Manghnani of Modern Shares & Stock Brokers told NDTV that if the Nifty slips below 8,146 he will go short. The Nifty can fall to 7,600-7,700 in this case, he added.
Domestic stocks came under pressure tracking Japan’s Nikkei benchmark, which extended losses to over 500 points in the last hour of trade. Overnight, the Dow Jones index in the US ended 325 points or 1.8 per cent.
Investors rushed to sell risk assets, such as stocks, amid the continued slide in oil prices. Crude oil prices plunged as much as 6 per cent on Monday to hit their lowest since spring 2009. The slump in crude prices has raised doubts about global economic growth.
“Falls in oil prices are going beyond many people’s expectations. This will put pressure on the earnings of U.S. energy firms,” said Hirokazu Kabeya, senior strategist at Daiwa Securities.
Although crude futures rebounded in Asia, concerns that current low prices would squeeze many energy producers hurt any assets with close links to energy.
Adding to the gloom was increasing speculation that Greece might be kicked out of the eurozone if a left-wing party that has vowed to end austerity measures and erase a big portion of its debt wins in Jan. 25 elections as widely expected. (Read the full story here)
India benefits from low oil prices as the country imports nearly 80 per cent of its oil needs. But, the global selloff may force foreign investors to book profits in Indian shares and repatriate funds, analysts say. Indian stock markets finished 2014 with 30 per cent gains as FIIs pumped in $ 42 billion in equities and debt.
Energy stocks were the biggest underperformers in trade today with stocks such as ONGC and Cairn India falling over 3 per cent. Index heavyweight Reliance Industries traded 2.3 per cent lower.
Recent gainers also witnessed profit taking. The Bank Nifty fell nearly 2 per cent.
49 of the 50 stocks in Nifty traded. Tata Motors, which had gained more than 6 per cent in the last four sessions, declined 3.5 per cent.
Asian Paints, which benefits from lower crude oil prices, was the only Nifty gainer, up 0.2 per cent.
A brief crash in Nifty futures, probably due to erroneous trades also weighed on sentiments, traders said. (Read)
As of 11 a.m., the Sensex traded 541 points lower at 27,301, while the Nifty was down 160 points at 8,220.
(With inputs from Reuters)