Mumbai, Sep 5 (PTI): North Korea's latest act of defiance with the testing of hydrogen bomb in spite of repeated US warnings today gave markets more pain as Sensex and Nifty both registered losses, snapping three days of gains.
Pyongyang on Sunday claimed that it had successfully tested a hydrogen bomb -- by far its most powerful test -- that can be loaded on to an intercontinental ballistic missile, sparking global alarm and drawing UN condemnation.
Most Asian markets reacted with fear and saw frenzied selling. Europe too turned shaky.
Underpinned by nervousness, the benchmark Sensex lost 189.98 points -- 0.60 per cent -- to close at 31,702.25, spooked by the surcharged atmosphere after North Korea's nuclear tests.
The Nifty went below the 9,900 mark intra-day, but just recovered in time to settle at 9,912.85, still down 61.55 points, or 0.62 per cent.
"The North Korean impasse did curtail risk appetite, especially with markets looking for cues to further the uptrend. Markets will, however, take positive cues from the Cabinet reshuffle done over the weekend, which holds potential for economic reforms reaching the ground level, with less than two years before general elections," said Anand James, Chief Market Strategist, Geojit Financial Services.
Investors went for booking profit that in part explained the weakness, traders said. They turned to safe haven assets such as gold, silver, Treasury futures and Japanese yen amid the spike in global tensions.
The rupee reversed its early gains against the US dollar in afternoon trade on exit of foreign capital.
Adani Ports, the biggest loser in the Sensex map, Infosys, Airtel, HDFC Bank and Hindustan Unilever all fell up to 2.6 per cent.
The key indices were also affected by losses in Hindustan Unilever, Hero MotoCorp, Asian Paints, Tata Motors and Bharti Airtel, which fell by up to 1.94 per cent.
Railway-related stocks were in the spotlight as Piyush Goyal became the new Railway Minister after the Cabinet reshuffle. The elevation sparked gains in BEML, Titagarh Wagons, Texmaco Rail, Stone India and Kernex Microsystems, jumping up to 4.76 per cent.
Foreign portfolio investors (FPIs) net diluted shares worth Rs 832.81 crore on Friday. Domestic institutional investors (DIIs) kept faith in India story, making purchases worth of Rs 731.72 crore, showed provisional data.
In keeping with the overall trend, mid- and small-cap indices declined.
The BSE realty index slipped the most losing 1.39 per cent. Similar weakness was witnessed in IT, technology and banking indices.