Reversing a positive trend, Indian markets fell sharply today after the Army said it had conducted surgical strikes against terrorists across the Line of Control on Wednesday night.
The Sensex fell as much as 572 points at day's low before closing at 27,827, down 465 points. Nifty ended at 8,591, down 153 points. The rupee fell by 46 paise to 66.91 at day's low against the US dollar, before ending at one-week low of 66.85.
India Volatility Index, referred to "fear gauge", jumped 33 per cent to a seven-month high of 18.45, reflecting nervousness among market participants.
"The markets reacted to news of surgical strikes," said Ashtosh Raina, head of foreign-exchange trading at HDFC Bank. "Any tension is definitely going to hurt sentiment."
Dipan Mehta, a member of BSE & NSE, said: "An element of uncertainty has crept into the market. Foreign investors will also view this as an additional risk premium for putting their money into Indian market."
Anil Manghnani of Modern Shares and Stock Broker said 8,500 is very crucial support level for Nifty and any close below this level will trigger more downside.
Meanwhile, Economic Affairs Secretary Shaktikanta Das said he expects the rupee and stock markets to stabilise in a few days.
Analysts say the inflows from the foreign investors would be closely watched. Foreign investors have put in nearly $7 billion into the Indian markets so far this year.
The broader markets which had recently outperformed the benchmark indices also came under heavy selling pressure. The BSE mid-cap and small-cap indices slumped nearly 4 per cent.
"Markets will closely watch the next few days for further developments. Any such conflict creates uncertainty in the investment climate," said Shubhada Rao, chief economist at Yes Bank.
The selling pressure was intense across all the sectors. 48 out of 51 stocks in Nifty ended in the red.
(With Agency Inputs)
The Sensex fell as much as 572 points at day's low before closing at 27,827, down 465 points. Nifty ended at 8,591, down 153 points. The rupee fell by 46 paise to 66.91 at day's low against the US dollar, before ending at one-week low of 66.85.
India Volatility Index, referred to "fear gauge", jumped 33 per cent to a seven-month high of 18.45, reflecting nervousness among market participants.
"The markets reacted to news of surgical strikes," said Ashtosh Raina, head of foreign-exchange trading at HDFC Bank. "Any tension is definitely going to hurt sentiment."
Dipan Mehta, a member of BSE & NSE, said: "An element of uncertainty has crept into the market. Foreign investors will also view this as an additional risk premium for putting their money into Indian market."
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Anil Manghnani of Modern Shares and Stock Broker said 8,500 is very crucial support level for Nifty and any close below this level will trigger more downside.
Meanwhile, Economic Affairs Secretary Shaktikanta Das said he expects the rupee and stock markets to stabilise in a few days.
Analysts say the inflows from the foreign investors would be closely watched. Foreign investors have put in nearly $7 billion into the Indian markets so far this year.
The broader markets which had recently outperformed the benchmark indices also came under heavy selling pressure. The BSE mid-cap and small-cap indices slumped nearly 4 per cent.
"Markets will closely watch the next few days for further developments. Any such conflict creates uncertainty in the investment climate," said Shubhada Rao, chief economist at Yes Bank.
The selling pressure was intense across all the sectors. 48 out of 51 stocks in Nifty ended in the red.
(With Agency Inputs)
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