North Korea firing a missile over Japan on Tuesday hit stock markets world wide, as fresh geo-political tensions sent investors rushing to save haven assets. The global shock, coupled with the expiry of futures and options contracts this week, led to India's benchmark indices declining more than 1 per cent, after having gained for four consecutive sessions.
The BSE Sensex tumbled 362 points or 1.1 per cent to end at 31,388.39 points while the NSE Nifty closed 117 points or 1.2 per cent lower at 9,796.05 points.
The indices had in the session slumped to their biggest intra-day percentage fall in almost nine months; the Sensex hitting a day's low of 31,360.81 points.
"Geopolitical worries have reared its ugly head again. Just as when traders breathed a sigh of relief as India and China managed to resolve Doklam logjam, North Korea has played mischief after it launched a missile that flew over Japan, triggering losses in assets across the border," said Sageraj Bariya, vice-president at East India Securities.
Among the Sensex components, 28 of the 30 stocks ended in the red on Tuesday. ONGC, Coal India, Reliance, HDFC, Sun Pharma and NTPC, all ended more than 2 per cent lower.
Heavy selling by Foreign Institutional Investors (FII) over the past month also ensured that "risk appetite was down to a trickle," said Anand James, chief market strategist at Geojit Financial Services.
So far in August, FIIs have pulled out Rs 14,610 crore from India's equity markets, according to data from NSDL as concerns grew over rising US-North Korea tensions as well as the standoff between Indian and Chinese troops in Sikkim.
India and China had on Monday decided to withdraw troops from the Doklam region.
In other Asian markets, Japan's Nikkei Stock Average, Singapore's Straits Times Index and Hong Kong's Hang Seng closed about 0.5 per cent lower. European markets also fell sharply, with the FTSE100, German Dax, France's CAC40 and the Madrid General Index all trading more than 1 per cent lower.
