Sensex reverses early gains, down 44 points on rising Iraq unrest

Mumbai, Jun 19 : In volatile trading, the benchmark Sensex today failed to maintain early gains and ended down 44.45 points at 25,201.80, led by losses in ONGC and RIL scrips, as oil continued its upmove on fighting in Iraq. The Sensex resumed higher at 25,327.09 and firmed up further to a high of 25,425.85 on initial buying mainly in realty, IT, Teck and power counters. This was on account of overnight rise in the US market after US Federal Reserve gave a positive assessment of the world’s largest economy and committed to retaining its accommodative monetary policy.

Stocks of ONGC, India’s largest state-owned oil explorer, plunged 5.13 per cent, the most in three years, GAIL lost 1.88 per cent, while RIL fell 2.38 per cent, the most in a month. Shares of state-run oil companies, HPCL plunged 3.97 per cent and BPCL lost 4.67 per cent. Reports saying higher gas pricing may be allowed only for incremental output, also hit investor appetite. Pulled down heavy losses in oil & gas shares, the 30-share Sensex declined afterwards to 25,069.66 before settling at 25,201.80, showing a loss of 44.45 points or 0.18 per cent. Yesterday, it had slipped about 275 points.

The CNX 50-share Nifty dropped by 17.50 points, or 0.23 per cent, to close at 7,540.70 today. Data showing Foreign portfolio investors (FPIs) bought shares worth a net Rs 366.18 crore yesterday, failed to lift sentiment. Jignesh Chaudhary, Head of Research, Veracity Broking Services said: “Investors are being watchful as growing tension in Iraq has created negativity in the market.”

Oil prices rose in afternoon Asian trade after Washington today weighed calls for air strikes on militants bearing down on Baghdad.
The US benchmark West Texas Intermediate (WTI) for July rose 44 cents to USD 106.41 while Brent crude for August gained 18 cents to USD 114.44 a barrel. Rising oil prices threaten to inflate the fuel import bill and push inflation higher in the Indian economy.
Asian markets ended mixed as crude oil rose. Key indices in China, Hong Kong and Singapore dropped while indices in Japan, South Korea and Taiwan moved up.