The market capitalisation of BSE-listed companies plunged to Rs 144.13 lakh crore today from Rs 145.33 lakh crore recorded in the previous session
The S&P BSE Sensex plunged over 300 points on Wednesday after China announced new tariffs on 106 US products, which include soybeans, cars, and whiskey.
After two successive days of buying, bears clawed back on D-Street and pushed benchmark indices below key support levels. The domestic equity market wiped off Rs 1.2 lakh crore in investor wealth on Wednesday.
The market capitalisation of BSE-listed companies plunged to Rs 144.13 lakh crore today from Rs 145.33 lakh crore recorded in the previous session.
China on Wednesday issued a USD 50-billion list of US goods including soybeans and aircraft targeted for possible retaliation in an escalating technology dispute with Washington that companies worry could set back the global economic recovery, said an AP report.
Apart from global overhang, expectations remain muted for the RBI policy announcement scheduled on Thursday, with no rate change largely anticipated. Sectorally, banks underperformed in trade today, giving away most of the gains accumulated over the previous two sessions.
The Nifty Bank index lost nearly 400 points while the Nifty50 slipped more than 100 points as all sectoral indices are in the red barring Auto. Banks remain under pressure with Nifty bank slipping 400 points. Financials drag Nifty by over 50 percent.
Only 8 Nifty stocks closed in the green; Tata Motors and Eicher top gainers. Market breadth slipped in favour of declines. The advance-decline ratio at 3:4.
The Dow Jones futures are down 2 percent, indicating negative opening on Wall Street later today.
The Nifty50 has wiped out most of the gains made in the last two trading sessions post today’s fall. The index closed 116 points lower or 1.14 percent at 10,128.40.
The S&P BSE Sensex closed above its crucial psychological support level of 33,000 after breaching it earlier today. The index closed 351 points lower or 1.05 percent at 33,019.
On the sectoral front, the S&P BSE Metal index lost nearly 3 percent, followed by BSE Consumer Durable which saw a fall of 2.5 percent, and Capital Goods index which fell nearly 2 percent.
The fall in the S&P BSE Sensex was led by losses in HDFC Bank, HDFC, L&T, Infosys, and Kotak Mahindra Bank. On the other hand, Tata Motors rose 3.4 percent, followed by Tata Motors DVR which gained 2.6 percent.
Moneycontrol spoke to market experts on how they read the developments and what to expect going forward:
Jagannadham Thunuguntla, Sr. VP and Head of Research (Wealth), Centrum Broking LimitedÂ
Just when markets were attempting to make a comeback from the bearish sentiment of Feb and Mar, the re-emergence of trade war has disturbed the momentum. Chinese tit-for-tat response to US tariff hike with a reciprocal tariff has triggered concerns that we may be in a long drawn trade war.
Trade war will be definitely the single biggest trigger point at the moment for global markets. It’s quite crucial that trade tensions have to be diffused for markets to make sustained bullish recovery. From Indian stand point, upcoming results and political developments have also to be closely watched.
Nikhil Kamath, Co-Founder, Zerodha
Markets opened flat for the session and largely held up until noon, around noon news broke of China fighting back against American tariffs by imposing some tariffs of their own. Most importantly on Soybean and American Cars, this sent down futures lower with the benchmark futures correcting close to 450 points intraday. The fall, in turn, caused global weakness on fears of a trade war and sent our markets lower.
Expectations remain muted for the RBI policy announcement scheduled tomorrow, with no rate change largely anticipated. Sectorally, banks underperformed in trade today, giving away most of the gains accumulated over the previous two sessions. ICICI sec listed and corrected close to 15 percent in trade today.
We are neutral at the current juncture and would advocate a wait-and-watch approach at this point.
Karthikraj Lakshmanan, Senior Fund Manager-Equities, BNP Paribas Mutual Fund
It has been a tumultuous day on the bourses today as investors grew weary of renewed trade war fears between the US and China, and adopted a note of caution. China today reportedly announced additional tariffs on USD 50 billion worth of US goods.
China will impose additional tariffs of 25Â percent on 106 US goods including soybeans, autos, chemicals, some types of aircraft and corn products, among other agricultural goods. Despite opening on a flat note, benchmark indices succumbed to global pressure to finally close the day with losses of over 1 percent.
Additionally, traders and investors awaited the outcome of the RBI’s (Reserve Bank of India’s) first monetary policy meeting of the financial year, which is to be announced tomorrow. Barring the auto index, which remained firm due to strong sales numbers from an auto giant, all other sectoral indices on the National Stock Exchange (NSE) traded in the red.
Dharmesh Shah – Head Technical at ICICI Direct.com Research
Nifty on Wednesday’s trade reacted lower from the upper band of the falling cannel containing the entire price activity since mid of February 2018 placed around 10300 levels on the back of weak global cues as global trade war intensified.
We expect the index to extend the time wise consolidation and oscillate between broader range of 9950 and 10300 levels while focus will shift to stock specific action as we enter into Q4 earning season. We expect the broader markets to extend relative outperformance while index remains in consolidation mode.
