Sensex tanks 275 pts in early trade on global rout

Mumbai :Market benchmark Sensex slumped by over 275 points and the NSE Nifty again broke below the 7,400-mark in early trade due to sustained capital outflows amid global sell-off on renewed concerns over slowing growth after oil prices again cracked USD 30 a barrel.

The rupee, which again breached the 68-mark against the dollar also had its bearing on the domestic equities.

The 30-share index was 275.35 points or 1.12 per cent lower at 24,263.65 in early trade with all the sectoral indices led by power, capital goods, realty and banking, trading in the negative zone, falling up to 2.99 per cent.

Reserve Bank’s dovish stand on policy rates yesterday had failed to soothe jittery investor nerves, which were hit by a sliding crude oil prices, as the market benchmark Sensex plummeted by 286 points.

The National Stock Exchange Nifty again slipped below the 7,400-mark, falling 85.55 points or 1.14 per cent to 7,370.

Laggards from the Sensex kitty included BHEL, ONGC, GAIL, Tata Motors, SBI, Wipro, ICICI Bank, Axis Bank, L&T, Bharti Airtel, TCS and Maruti Suzuki, dragged down the benchmark.

Among other Asian markets, Hong Kong’s Hang Seng index was down 2.82 per cent and Japan’s Nikkei was down 3.14 per cent in early deals. China’s Shanghai Composite index too fell 1.17 per cent.

The US Dow Jones Industrial Average ended 1.80 per cent
lower in yesterday’s trade. PTI SUN KPS

Flash: US crude stays below USD 30 in Asia as oil price losses deepen

Singapore, Feb 3 (AFP) US crude stayed below USD 30 per barrel in Asia today as oil price losses deepened on expectations US petroleum stockpiles will rise further and exacerbate the already oversaturated global market.

A rally last week driven by speculation that Russia and members of the Organization of the Petroleum Exporting Countries would reach an agreement to slash output in the oversupplied market has fizzled out amid scepticism such a deal would be reached.

Traders are expecting more bearish news when the US Department of Energy releases its weekly inventory on commercial crude stockpiles later Wednesday, with analysts expecting the inventories to rise.

An increase typically means softer demand in the world’s top oil consumer.

At around 0340 GMT, US benchmark West Texas Intermediate (WTI) for delivery in March slid 18 cents, or 0.60 per cent, to USD 29.70 and Brent crude for April dipped to USD 32.58 a barrel, down 14 cents, or 0.43 per cent.

WTI closed at USD 29.88 on the New York Mercantile Exchange on Tuesday, the first time the benchmark settled below USD 30 since January 21.

“With a build of about 4.0 million barrels expected, that’s another event that traders are expecting could push oil prices down,” Michael McCarthy, chief market strategist at CMC Markets, said, referring to the closely-watched US inventory data.

“Some of the selling that we are seeing today is in anticipation of the larger than expected build tonight,” he told AFP.

McCarthy added that hopes pinned on coordinated action between Russia and OPEC to slash output have now faded.

“The stepping away from the idea that there might have been cooperation between suppliers is another factor that is weighing on the prices,” he said.

“That shows the positioning of the market, that what was essentially a rumour was able to drive the price so much higher.”

Russia announced Tuesday that it pumped a post-Soviet record amount of crude oil and condensate in January of about 18.9 million barrels a day, as it fights to hold onto market share. OPEC in December rejected calls to trim output.