The BSE benchmark Sensex managed to regain its feet after plummeting by 615 points in early trade on Tuesday, paring its loss to just 265 points as domestic and foreign investors reaffirmed their confidence in shares of Indian blue-chips at low prices.
The Bombay Stock Exchange’s 30-share Sensex registered its sharpest decline since August 17, 2009, by tanking 615 points in Tuesday’s trade as geo-political tension in East Asia and the domestic political crisis took their toll on the investment sentiment.
Prior to the exchange of fire between North and South Korean troops near the two neighbours’ disputed western border, the Sensex was down by about 1 per cent amid weak cues from Asian markets and concerns over the political future of the UPA-led government, which has been rocked by corruption allegations.
However, the Sensex managed to salvage some ground in the latter half of the session as domestic and foreign funds made brisk, but conservative, purchases of blue-chips at low levels.
The broad-based National Stock Exchange Nifty index also ended 75.25 points down at 5,934.75, after touching a low of 5,824.95 points during intra-day trade.
In the 30-BSE index components, 27 stocks fell, while three closed in positive terrain. Reliance Industries, the scrip with the heaviest weight on the Sensex, fell by Rs. 17.20 to Rs. 994.90, while Infosys — the firm with the second highest weight in the 30-share index — slid by Rs. 28.80 to Rs. 3,013.30.
Other prominent losers include ICICI Bank, SBI, HDFC Bank, BHEL, Tata Motor, Tata Power, Tata Steel, ACC and Tata Consultancy Services.
The realty sector index was the worst-hit by the bearish sentiment, falling by 3.26 per cent to 3,132.70, while the Public Sector Undertaking index dropped by 1.85 per cent to 9,580.20. The metal sector index shed 1.79 per cent to 16,367.55 and the oil and gas index by 1.69 per cent to 10,207.49.
Meanwhile, news of the renewed hostilities between North and South Korea took a toll on other Asian stock markets as well. European stock markets were also down as Ireland’s request for a bailout package from the European Union failed to assuage edgy investors’ fears of a resurgent euro zone debt crisis.