Indian equity continued the downtrend for second consecutive session on the back of fall in European markets and further rise in crude oil prices. The Nifty ended below the 5450 level on Wednesday, pulled down by financial, infrastructure, realty and technology companies' shares.
Crude oil inched up by 2.5% to USD 96.08 a barrel today - highest level since October 2008 - on growing fears that unrest in Libya could spread to other top oil producers in the region and cut more output.
Violent clashes in Libya have resulted in at least three oil companies halting output in Africa's third-largest producer, which pumps 1.6 million barrels per day (bpd), or nearly 2 percent of global supply.
"The Libyan situation has just highlighted the concern for the entire Gulf region. As we have seen this contagion spread from Tunisia to Egypt to Libya and now to Bahrain and Dubai and other areas of influence which are now coming under the concern of the people’s revolution. It is more of a concern for the entire area and the potential that this could escalate, which is the concern and why people are actually building in this Middle Eastern premium," Jonathan Barratt, the Managing Director of Commodity Broking Services said.
International Energy Agency (IEA) executive director Nobuo Tanaka said that sustained oil prices over USD 100 per barrel for the rest of the year could tip the global economy back into a repeat of the 2008 economic crisis.
European markets also slipped half a percent to one percent, at the time of closing of Indian equities. The 30-share BSE Sensex fell 118 points, to settle at 18,178 and the 50-share NSE Nifty dropped 32 points, to end at 5,437.
However, Anil Dhirubhai Ambani Group (ADAG), auto and cement companies' shares limited the losses. Heavyweights Reliance Industries and HDFC gained one percent.
Violent clashes in Libya have resulted in at least three oil companies halting output in Africa's third-largest producer, which pumps 1.6 million barrels per day (bpd), or nearly 2 percent of global supply.
"The Libyan situation has just highlighted the concern for the entire Gulf region. As we have seen this contagion spread from Tunisia to Egypt to Libya and now to Bahrain and Dubai and other areas of influence which are now coming under the concern of the people’s revolution. It is more of a concern for the entire area and the potential that this could escalate, which is the concern and why people are actually building in this Middle Eastern premium," Jonathan Barratt, the Managing Director of Commodity Broking Services said.
International Energy Agency (IEA) executive director Nobuo Tanaka said that sustained oil prices over USD 100 per barrel for the rest of the year could tip the global economy back into a repeat of the 2008 economic crisis.
European markets also slipped half a percent to one percent, at the time of closing of Indian equities. The 30-share BSE Sensex fell 118 points, to settle at 18,178 and the 50-share NSE Nifty dropped 32 points, to end at 5,437.
However, Anil Dhirubhai Ambani Group (ADAG), auto and cement companies' shares limited the losses. Heavyweights Reliance Industries and HDFC gained one percent.
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