INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Domestic equities came under strain on Thursday, mirroring Asian weakness after the arrest of a top executive of Chinese
technology giant Huawei.
The arrest, which came at the request of the US, triggered a big selloff in Asian shares as fresh worries
surrounding global trade war resurfaced.
A lacklustre rupee brought more pain
The local currency broke below the 71-mark and hit an intraday low level of 71.14 against the dollar.
What spoiled mood further was action
of rating agency Fitch, which cut India’s FY21 GDP growth forecast to 7.1 per cent from 7.3 per cent
It also sees the rupee weakening to 75 by the end of 2019
The global rating firm cut India growth estimates on reduced credit availability and higher financing costs
Over a 3 per cent fall in crude prices did little to buoy sentiment
But investors are tracking oil prices with keen interest ahead of the crucial Opec decision on any production cut.
The BSE Sensex settled at
35,312, down 572 points or 1.59 per cent, with only Sun Pharma holding out
Maruti Suzuki, Tata Motors, YES Bank, Reliance Industries and Adani Ports struggled most and shed up to 4.89 per cent.
The 50-share Nifty
closed the day lower by 182 points, or 1.69 per cent, at 10,601, with only four scrips in the green.
It was the third straight day of losses
for both Sensex and Nifty
BSE's market cap declined by Rs 3.71 lakh crore on Thursday
Auto, IT, realty and PSU Bank stocks saw heavy selling pressure
Nifty Realty ended down 2.40 per cent, with Auto and IT sliding up to 2.24 per cent
Banking stocks felt the squeeze after the Reserve Bank of India (RBI) said it would link retail loans to external benchmarks replacing MCLR
Nifty PSU Bank index closed down 1.86 per cent, with all of its 12 stocks registering losses
All sectors on the BSE ran up losses, with oil and gas 1.70 per cent down ahead of the Opec meet outcome, which is due tomorrow.
BSE Midcap
and Smallcap indices fell in line with the Sensex, losing 1.54 per cent and 1.36 per cent, respectively.
Globally, European shares fell
after the top executive's arrest fuelled new worries over the Sino-US trade war, hitting export-oriented technology and auto stocks
By 0933 GMT, the pan-regional STOXX 600 index had fallen 1.8 per cent to its lowest level since December 2016, according to a Reuters
report.
Expert-takeVinod Nair, Head of Research, Geojit Financial Services
Global markets are in a risk–off mode due to fresh flare-up of
tensions between China and US
Oil prices are inching up on expectation of production cuts by Russia and Opec, weakening the rupee further
The sell-off was broad based, while IT and auto are the worst hit
Investors are in wait and watch mode on account of evolving global macro headwinds and state elections.
Jagannadham Thunuguntla, Senior V-P
and Head of Research (Wealth), Centrum Broking
Capital markets had a rough day, as they are trying to navigate too many data points such as
re-emergence of sharp weakness in Indian rupee, upcoming Opec meeting outcome in terms of production cut, and upcoming results of 5 state
The nervousness is quite evident as there is sharp sell–off across the industries, and especially in those stocks where there are
corporate governance concerns
We feel investors should be ready with shopping-list of stock ideas as markets can surprise on upside if macros stabilise, and election
results come out palatable to markets.
