Markets

Sensex drops over 1% as North Korea’s missile jolts world markets

The BSE Sensex closed lower by 362 points, or 1.14%, to 31,388, while the Nifty 50 fell 117 points, or 1.18%, to 9,796. Photo: Reuters

Mumbai: Benchmark equity index Sensex dropped in line with its Asian peers, which fell after North Korea fired a missile over northern Japan, escalating worries over geopolitical risks in the world.

Early on Tuesday, North Korea fired a ballistic missile over Japan’s northern Hokkaido island into the sea, prompting warnings for residents and escalating tensions in the Korean peninsula.

Risk was off the table, and investors shun riskier bets in favour of safe-haven assets.

Earlier in the day, BSE’s 30-share Sensex fell 0.84% or 265.52 points to 31,485.30, while National Stock Exchange’s 50-share Nifty dropped as much as 0.83% or 82.45 points to 9830.35.

The BSE Sensex closed lower by 362 points, or 1.14%, to 31,388, while the Nifty 50 fell 117 points, or 1.18%, to 9,796.

Nearly two shares declined for every share that advanced on the BSE, indicating weak market breadth.

Only four of 30 Sensex stocks traded in the positive territory.

“The geopolitical risks in the Korean Peninsula are weighing on world markets, and India is no exception. The market is keeping a wary eye on the developments there,” said Ajay Bodke, chief executive and chief portfolio manager at brokerage Prabhudas Lilladher Pvt. Ltd.

“However, mid caps and small caps are holding well. That said, if the situation deteriorates in the Korean peninsula, then the mid cap and small cap stocks could be hammered heavily. Investors need to exercise caution,” added Bodke.

BSE mid-cap and small-cap indices were down 0.28% and 0.44%, respectively.

Among Sensex stocks, state-run NTPC Ltd shed the most with a 3.32% decline. Mortgage lender Housing Development Finance Corp. followed next with a 1.85% fall.

All the sectoral indices traded lower with BSE telecom index falling the most—1%. BSE power index followed next with a 0.78% decline.

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