Bourses turn cautious after US airstrike news

Mumbai: The equity markets ended the week on a subdued note as cautious investors booked profits in frontline stocks amidst increasing fear regarding an escalation of tension in the Middle East that could disrupt oil supply and push the global crude oil prices higher.

The Nifty slipped below its crucial support level of 9,200 level mark and closed the session at 9,198.30, losing 63.65 points or 0.69 per cent. On the other hand, the BSE Sensex ended the day at 29,706.61, down 220.73 points or 0.74 per cent.

Even global equity markets witnessed selling pressure after the US fired cruise missiles at a Syrian airbase on Thursday that immediately led to a spike in crude oil prices.

However, global equities recovered some lost ground after an US official said that the strike was a one-off event and the government is not in favour of escalating it further.

“Air strikes by US forces on Syria caused a spike in oil prices. This was unexpected change of stance from US President Donald Trump on Syria as he had earlier said in his election campaign that that he has no plans to widen the conflict in Syria. However markets across the world reacted maturely and has side stepped the issue at least temporarily,” said Jimeet Modi, CEO, SAMCO Securities.

The development triggered led to FPIs offloading shares worth Rs 262.37 crores on Friday. “Any major confrontation in Syria is likely to impact the global markets. Additionally, the meeting between the US & Chinese Presidents will be closely watched by investors to get more cues on how they tackle trade and geopolitical issues. Considering this, a state of consolidation in the domestic markets cannot be ruled out in the near term,” said Vinod Nair, head of research at Geojit Financial Services.