Saturday, December 2, 2023

Brexit forecast pulls down key Indian equity indices sharply

Mumbai, June 24 (IANS) Amid predictions that Britain has opted out of the European Union in a historic referendum, key Indian equity indices were trading sharply lower on Friday with barely an hour left for the actual result, awaited anxiously the world over.

The sensitive index (Sensex) of the BSE, which had closed on Thursday at 27,002.22 points, opened the next morning at 26367.48 points.

An hour into trading trading, it drifted sharply and was ruling at 226,073.55 points, down 928 points, or 3.44 per cent.

In the pre-open trades, the 30-scrip index was down as much as 634.74-points or 2.35 per cent. An indication came from the SGX Nifty, which trades on the Singapore exchange and ahead of the opening bell in India, was down over 2.75 per cent.

At the National Stock Exchange (NSE), where the 51-scrip Nifty had closed at 8,270.45 points, the opening bell was at 8,029.10 points.

Thereafter, the index was ruling below the 8,000-points mark at 7,972.35 points, down 298.26
points, or 3.61 per cent

“Indian markets’ direction will be uncertain in the mixed results coming out from the EU referendum poll in the UK with neither sides seeming to have a convincing lead,”Angel Broking said.

In fact, the British pound that had rallied to nearly $1.5 in early trades, fell sharply to $1.35 — the lowest level since 1985.

On Thursday, sensing that the chances of Britain remaining in the EU were higher, the investor mood had lifted the Sensex by 236.57 points or 0.88 per cent, while the wider 51-scrip Nifty edged up by 66.75 points or 0.81 per cent.

This, despite foreign funds being net sellers of Indian equities on Thursday valued of Rs 31.86 crore ($4.72 million), as per data with the National National Securities Depository Limited.

For months, the global stocks, currency and commodity markets have been on the edge over how Britons will vote on whether or not to remain a member of the European Commission, which the nation had joined in 1973.

The global investor, though, has been in favour of continuity.

In the US, all three major indices saw some impressive rallies on Thursday. The S&P 500 index gained and the Dow Jones Industrial Average gained around 1.3 per cent each and the Nasdaq Composite Index rose 1.6 per cent.

“US Markets closed higher Thursday, with all three indexes rallying, as investors wagered that the UK will choose to remain in the European Union in a historic referendum with far-reaching implications,” Angel Broking said.

“The European markets ended Thursday’s session in the green, bringing its winning streak to five sessions. The gains were also fueled by optimism that the UK will remain a part of the European Union, following the results of recent polls.”

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