Share market on Monday: Overall breadth of the market was negative
The stock markets traded on a sharply lower note on the first day of the week, with the Sensex plunging 467 points to close below the 38,000 mark for the first time since August 17. The BSE benchmark index closed at 37,922, while the NSE Nifty declined 151 points, or 1.3 per cent, to settle at 11,438. The Sensex and Nifty registered their biggest single-day falls since March 16 and February 6 respectively. The fall in the equities came amid the rupee touching fresh all-time low against the dollar amid renewed concerns on the US-China trade war.
Here are 10 things to know about Monday's trading session:
- Losses were visible across the sectors. The NSE's sectoral indices of banking, financial services, auto, FMCG, metal and pharma closed 1-2 per cent lower each.
- Forty two stocks on the NSE Nifty finished the session with losses. Top laggards on the 50-scrip Nifty index were Bajaj Finance, Bajaj Finserv, Indiabulls Housing Finance, Sun Pharma, BPCL, Mahindra and Vedanta, closing around 3.5 per cent lower.
- The overall breadth of the market was sharply negative, with 595 advancers against 1,161 decliners on the NSE. On the BSE, 1,060 stocks finished the session with gains against 1,676 that ended lower.
- Analysts said weakness in the rupee along with US-China trade war concerns affected the sentiment. "Weak global cues combined with widening trade deficit, due to continuous fall in rupee against the dollar, dampened the sentiment. Selling pressure was witnessed across the board...The fall was evident, due to deteriorating local cues and continuous threat of trade war escalation," said Jayant Manglik, president, Religare Broking.
- Equities in most Asian peers traded lower as trade tensions between the US and China remained in focus. Traders braced for a potential escalation in the tariff row between the world's two largest economies after US President Donald Trump raised the stakes in the dispute on Friday.
- On Friday, Mr Trump warned he was ready to slap tariffs on virtually all Chinese imports into the United States, threatening duties on another $267 billion of goods on top of $200 billion in imports primed for levies in coming days. Beijing has warned of retaliation if Washington launches any new measures, but it is running out of room to match them dollar-for-dollar, raising concerns it could resort to other measures such as weakening the yuan or taking action against US companies in China.
- Investor sentiment also took a blow after Moody's Investors Service said sustained weakening of the rupee is credit negative for Indian companies which generate revenue in rupees but rely on the US dollar debt to fund their operations.
- The fresh round of weakness in the rupee was in line with other Asian currencies under pressure from a stronger dollar, higher crude prices and rising global trade tensions.The rupee has depreciated nearly 14 per cent so far this year.
- Crude oil prices rose to trade near $78 a barrel as investors anticipated lower supply once new US sanctions against Iran's crude exports kick in from November. High crude prices along with weakness in the rupee puts pressure on trade deficit, say analysts. India meets more than 80 per cent of its oil requirements through imports.
- Current account deficit widened to $15.8 billion in April-June this year as against $15 billion in the corresponding period a year ago, mainly due to a higher trade deficit, Reserve Bank of India (RBI) data showed last week.
(With agency inputs)
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