(MENAFN- Gulf Times) The benchmark Sensex tumbled 360 points to end at 33,370.76 yesterday erasing all early gains as wary investors booked profits amid fears of a flare-up in crude oil prices following the shakedown in Saudi Arabia.
The 30-share index hit an all-time high of 33,865.95 intraday, before slumping to 33,341.82 in late afternoon deals on across-the-board sell-off. The index finally settled at 33,370.76 points, down by 360.43 points, or 1.07% over its last close. The broader NSE Nifty too dived by 101.65 points, or 0.97%, to close at 10,350.15. Both the key indices suffered their biggest single session fall since September 27.
Oil prices climbed 3.5% overnight to quote above $64 a barrel, the highest since early July 2015, as Saudi Arabia's crown prince cemented his power with an anti-graft crackdown which sparked fears of fresh geopolitical tensions and disruption in crude supplies.
A spurt in oil prices can trigger a fresh bout of inflation and spoil the fiscal maths of net energy importers like India. A weakening rupee, which depreciated by 39 paise to 65.07 against the dollar during the day, too dampened investor sentiment.
'Political disturbance in Saudi is triggering high volatility in the crude prices, which is negative for India leading to depreciation in INR. Additionally, continuous negative observations by USFDA on high quality Indian pharma companies are leading to a downgrade for the sector, said Vinod Nair, head of research, Geojit Financial Services.
Drug firm Lupin was the worst performer in the Sensex pack, crashing 16.84% to close at its 52-week low after the company said it has received warning letter from the US health regulator for its manufacturing facilities in Goa and Indore. Rival Cipla too faced selling pressure and slumped 7.18%.
Other laggards included SBI, Bharti Airtel, RIL, Sun Pharma, ONGC, Tata Steel, Tata Motors, Bajaj Auto and Asian Paints. However, gains in software exporters such as Infosys, TCS and Wipro on strengthening dollar cushioned the fall.
Foreign portfolio investors bought shares worth a net Rs576.27 crore on Monday, as per provisional data released by stock exchanges. Domestic institutional investors sold shares worth a net Rs263.84 crore.
The BSE healthcare index emerged as the worst performer, losing 3.51%, followed by realty 2.24%, consumer durables 2.03%, PSU 1.92%, power 1.81%, metal 1.64%, oil & gas 1.32%, bankex 1.26%, infrastructure 1.26% and capital goods 1.11%.
A similar trend was witnessed in the broader markets as investors preferred to take away profits at record levels, pulling down the mid-cap index by 1.47% and small-cap by 1.35%. Stocks of MMTC and STC ended higher by 10.18% and 2.97% after reports that the government is going ahead with the merger of its two trading firms.
Meanwhile the rupee yesterday weakened past 65-mark against the US dollar, while 10-year bond yield was at a fresh six-month high after international crude oil prices touched a new two-year high.
Analyst believe that a steady rise in oil prices may make it difficult for the government to achieve its fiscal deficit target, and may lead to an increase in inflation which may, in turn, lower the possibility of a rate cut by the Reserve Bank of India (RBI).
The rupee ended at 65.03 against the dollar, down 0.55% from its Monday's close of 64.68. The rupee opened at 64.63 a dollar and touched a low of 65.07 — a level last seen on October 27.
The 10-year bond yield closed at 6.927%, a level last seen on May 11, compared to its previous close of 6.858%. Bond yields and prices move in opposite directions.
Brent crude oil hit $64.17 per barrel yesterday — a 26-month high — after Saudi Arabia's King Salman ordered the arrest of ministers, princes and billionaires in an anti-graft drive in the world's biggest crude exporter.

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