Sensex pares losses after knee-jerk reaction to IAF strike

Mumbai, Feb 26 (IANS) Sensex trimmed major losses and was 100 points down in the Tuesday afternoon trade session, after it tanked over 500 points reacting to reports that the Indian Air Force (IAF) struck terrorist camps in Pakistan administered Kashmir.

This development is seen as an escalation to the already tense India-Pakistan ties in the backdrop of the February 14 Pulwama terror attack that killed 40 CRPF troopers.

At 1.28 p.m., the BSE Sensex traded 132.62 points or 0.37 per cent lower at 36,080.76 while the Nifty was down 29.50 points or 0.27 per cent at 10,850.60.

"The sharp fall in equity indices earlier was a knee-jerk reaction to the counter-terrorism operation, and it does not seem markets will react negatively any further...

"By the end of the session indices may return to normalcy more so because global cues and the lower oil prices will support the indices," Saurabh Jain, AVP, SMC Global, told IANS.

According to Foreign Secretary Vijay K. Gokhale, in an intelligence-led pre-emptive operation in the early hours of Tuesday, India struck the biggest training camp of Jaish-e-Mohammad (JeM) in Balakot.

Following the reports of the operation, which has eliminated a very large number of JeM terrorists, trainers, senior commanders and groups of jihadis, investors panicked leading to the sharp fall on the Sensex.

Global markets, however, continued to gain on easing trade tension between US and China and declining crude oil prices.

Among the sectors which gained were auto, IT and and media stocks.