Iraq and costlier oil spook Sensex, tanks 275 points

The BSE benchmark Sensex on Wednesday plunged about 275 points to close at 25,246.25 on across-the-board selling as costlier oil due to rising conflict in Iraq threatens to hurt the India economy that is already battling price rise and slowing growth.

World stocks were muted as investors waited for an update on the US economy later tonight from the Federal Reserve following its two-day policy meeting where it is widely expected to cut monthly stimulus further by $10 billion.

In energy trading, benchmark crude oil for July delivery added 41 cents to $106.77 in electronic trading on the New York Mercantile Exchange after militants pressing a major offensive in Iraq attacked the country's biggest oil refinery.

In India, state-run oil companies stocks came under pressure on fears that rising oil prices in the global market would raise subsidy burden. Shares of BPCL, HPCL and Indian Oil Corp slumped up to 4.82 per cent.

The 30-share index, after showing volatile movements during the session on alternate bouts of buying and selling, finally settled 274.94 points, or 1.08 per cent, lower at

25,246.25. It shuttled between 25,609.28 and 25,114.30. The gauge swing nearly 500 points during the session.

Yesterday, it had risen 330.71 points, or most in nearly two weeks.

After markets closed Tuesday, government unveiled a host of steps to tame inflation that has soared to a five-month high of 6.01 per cent in May.

Barring healthcare, all the sectoral indices today led by realty, power, consumer durables and oil and gas ended in negative zone with losses up to 2.10 per cent.

The 50-scrip National Stock Exchange index Nifty ended 73.50 points, or 0.96 per cent, lower at 7,558.20 after rising to 7,663.00 in early trade.

Shares of RIL fell 2.12 per cent to Rs 1,066.80 despite big-bang investment announcements at its 40th AGM.

Other prominent losers include BHEL, SBI, L&T, Coal India, HDFC Ltd, HDFC Bank and TCS.

Bucking the general trend, Cipla, Dr Reddy's and Hindalco among others ended higher.