Sensex sinks over 600 points on Korean clashes, recovers

MUMBAI: A benchmark index of Indian equities market slipped further into the red Tuesday, falling over 600 points in afternoon trade, as Asian markets were jittery on reports of North and South Korean soldiers exchanging fire.

The 30-share sensitive index ( Sensex) of the Bombay Stock Exchange (BSE), which opened at 19,841.42 points, fell 614 points or 3.08 percent to 19,342.69 points, from its previous close of 19,957.59 points.

The index, however, recovered in about 20 minutes, to rule 460 points lower at 19,497.17 points.

At the National Stock Exchange (NSE), the 50-share S&P CNX Nifty had also slipped 3.07 percent at 5,824.95 points.

Broader markets indices were in the red too, with the BSE madcap index ruling 2.32 percent lower while the BSE smallcap index moved down 2.98 percent.

All of the sectoral indices were in the negative. Realty, consumer durables and metal stocks were among the major losers.

"It’s a knee-jerk reaction to the tense situation in Korea," said K.K. Mital, head of portfolio management services at Globe Capital in New Delhi.

Foreign funds have bought a record $28.7 billion of Indian equities this year, helping the benchmark stock index climb more than 12 percent, and the market could be vulnerable if the tensions rattle investors.

The partially convertible rupee was at 45.57/58 per dollar, after touching 45.6750, its lowest since Sept. 23 and below 45.405/415 at close on Monday.

South and North Korea exchanged artillery fire Tuesday soon after dozens of shells fired from the North struck a South Korean island near the countries’ disputed western sea border.

The South Korean won tanked over four percent against the US dollar, indicating significant uneasiness in financial markets.(PTI)

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