Equities downbeat as oil prices rise after Iran strike on US troops

Mumbai (Maharashtra) [India], Jan 8 (ANI): Equity benchmark indices recovered from intraday lows but ended with marginal losses on Wednesday as investors feared a wider conflict in the Middle East after Iran fired missiles at US forces in Iraq overnight.

The attacks on Ain Al-Asad airbase and another at Erbil came hours after the funeral of top military commander Qassem Soleimani whose killing in a US drone strike led to sharp escalations in a developing conflict across the region.

India imports around 85 per cent of its crude oil requirement. Hence any rise in prices can lead to higher inflation and disturb the country's fiscal deficit.

The market sentiment was also tempered with domestic economic growth which the government expects at 5 per cent for financial year 2019-20, lower than the 2018-19 expansion rate of 6.8 per cent, mainly due to poor performance by the manufacturing and construction sectors.

The BSE S&P Sensex closed 52 points lower at 40,817 while the Nifty 50 slipped by 28 points at 12,025. Except for Nifty FMCG and IT, all sectoral indices at the National Stock Exchange were in the red.

Among stocks, Eicher Motors closed 4.3 per cent lower at Rs 19,900 per share while Coal India slipped by 2.5 per cent, Larsen & Toubro by 2.2 per cent and IndianOil Corporation by 1.9 per cent.

The other prominent losers were ONGC, Sun Pharma, Titan, Hero MotoCorp, Infosys and Tech Mahindra. However, Bharti Airtel, Yes Bank, Tata Consultancy Services, UltraTech Cement and Bajaj Finance showed marginal gains.

Meanwhile, Asian financial markets were in turmoil with stocks sliding into the negative zone as investors feared a wider conflict in the Middle East could push up oil prices and dent US corporate earnings due to rising energy costs.

Japan's Nikkei was down by 1.57 per cent, Hong Kong's Hang Seng by 0.83 per cent, South Korea's Kospi by 1.11 per cent and Shanghai Composite index by 1.22 per cent.

US President Donald Trump said in a tweet late on Tuesday that an assessment of casualties and damage from the strikes is underway and that he will make a statement on Wednesday morning (local time).

(ANI)