Indian equities tumble on global trade war tension
After two consecutive sessions of gains, the key indices of the Indian equity markets -- the BSE Sensex and the NSE Nifty50 -- tumbled on Wednesday after further trade protectionist measures imposed by two major global economies on each other spooked investors.
Mumbai: After two consecutive sessions of gains, the key indices of the Indian equity markets -- the BSE Sensex and the NSE Nifty50 -- tumbled on Wednesday after further trade protectionist measures imposed by two major global economies on each other spooked investors.
Besides, investors remained cautious ahead of the outcome of the central bank's first bi-monthly monetary policy of 2018-19 on Thursday.
On a closing basis, the wider Nifty50 of the National Stock Exchange (NSE) declined by 116.60 points or 1.14 per cent to 10,128.40 points.
The barometer 30-scrip Sensitive index (Sensex) of the BSE closed at 33,019.07 points -- down 351.56 points or 1.05 per cent from its previous session's close.
The Sensex shed almost 500 points from its day's high at 33,505.53 points on closing.
The BSE market breadth was bearish with 1,483 declines and 1,157 advances.
In terms of the broader markets, the S&P BSE mid-cap index edged lower by 0.92 per cent and the small-cap index by 1.01 per cent.
"Markets corrected sharply on Wednesday after two sessions of gains. The Nifty50 in the process broke the previous session's low of 10,171 points," Deepak Jasani, Head - Retail Research, HDFC Securities, told IANS.
"The weakness came on the back of weak global cues due to escalating trade war between China and the US. Indian indices tracked the European indices and Dow Futures -- both of which kept weakening," he added.
According to market observers, the domestic equity markets reacted to intensifying trade war fears after China on Wednesday unveiled a list of products worth $50 billion imported from the US that will be subject to higher tariffs, including soybeans, cars and chemical goods.
The Customs Tariff Commission of the State Council decided to impose additional tariff of 25 per cent on 106 items of products under 14 categories as a countermeasure after the US administration published a list of about 1,300 Chinese products it plans to hit with a 25 per cent tariff.
Vinod Nair, Head of Research, Geojit Financial Services, said: "Market slid approximately two per cent from day's high due to looming trade war tensions and caution ahead of Reserve Bank of India policy meet.
"Global market volatility continued to give a ripple effect to the market despite gradual recovery in domestic economy and moderation in inflation. RBI's policy is likely to support near term sentiment while clarity on earnings growth and monsoon will give more transparency in direction," said Nair.
On the currency front, the Indian rupee weakened by 13 paise to close at 65.15 against the US dollar from its previous close at 65.02.
In terms of investments, provisional data with the exchanges showed that foreign institutional investors bought scrips worth Rs 335.18 crore, while the domestic institutional investors divested in stocks worth Rs 152.55 crore.
All the sectoral indices slumped, barring the S&P BSE auto index which rose by 103.16 points.
Sector-wise, the S&P BSE consumer durables index plunged by 567.49 points, followed by banking index by 447.47 points, metal index by 370.48 points and capital goods index by 368.13 points.
Major Sensex gainers on Wednesday were: Tata Motors, up 3.60 per cent at Rs 355.70; Tata Motors (DVR), up 2.84 per cent at Rs 198.90; Hero MotoCorp, up 0.81 per cent at Rs 3,669.95; Hindustan Unilever, up 0.59 per cent at Rs 1,356.35; and Adani Ports, up 0.15 per cent at Rs 367.35.
The Sensex losers were: Tata Steel, down 3.29 per cent at Rs 560.45; Axis Bank, down 2.61 per cent at Rs 490.15; Larsen and Toubro, down 2.52 per cent at Rs 1,296.35; Kotak Bank, down 2.25 per cent at Rs 1,078.20; and Yes Bank, down 2.24 per cent at Rs 305.65.