Monday, March 21, 2011

Sensex slips 0.2 pc as Libya, oil worries weigh

Indian markets edged 0.2 percent lower in a choppy trading session on Monday as an escalating Libyan crisis and firm oil prices weighed on investor sentiment.

Oil prices rose by more than 1 percent on Monday as a United Nations mandated wave of air strikes on Libya and proliferating unrest in the Middle East fanned concerns about oil supply from the region.

The 30-share BSE index closed 0.22 percent, or 39.76 points, lower at 17,918.59 points, with 17 of its components declining. It rose as much as 0.7 percent early.

"People are cautious. The situation in Libya is worsening and all eyes are on oil prices. Let us see how the situation unfolds," said Deven Choksey, managing director and CEO of KR Choksey Shares.

The benchmark index is already down 13 percent year-to-date, making it one of the worst performing major markets in 2011.

The broader MSCI's measure of Asian markets other than Japan is down 4.1 percent in 2011, while MSCI's emerging markets index has shed 3.7 percent in the period.

Foreign funds have pulled out $1.8 billon from Indian equities since the start of the year up to March 17, pestered by sticky inflation.

Amongst the BRIC nations, Indian witnessed highest net redemption at $183 million in the week to March 16, fund tracker EPFR said.

Global equity funds at large faced outflows in that week as the Japan disaster combined with a bloody revolt in Libya, protests in Bahrain and the downgrading of Portuguese debt undermined investor appetite.

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