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Sensex drops 229 pts on growth, trade deal concerns; Nifty below 11,850

Factory output shrank to the lowest level in 8 years as all 3 broad-based sectors contracted.

Updated: Nov 13, 2019, 04.53 PM IST
As many as 25 out of 30 Sensex stocks closed lower.
Mumbai: Sensex and Nifty gave up early gains and closed in the red on Wednesday, in line with the weakness in global shares equities as the US President Donald Trump threatened to substantially increase tariffs if China failed to agree a trade deal.

The confusing signals over an impending US-China trade deal have kept world markets on the edge in recent times.

India’s disappointing Index of Industrial Production (IIP) data also kept sentiment subdued.

Factory output shrank to the lowest level in eight years as all three broad-based sectors of capital goods production, consumer durables, and infrastructure and construction goods contracted.

The Index of Industrial Production (IIP) fell 4.3 per cent in September compared with a contraction of 1.4 per cent in August and a growth of 4.6 per cent in factory output in the same month a year back.

Market at a glance
BSE Sensex closed 0.57 per cent or 229.02 points lower at 40,116.06, while NSE Nifty shed 0.61 per cent or 73 points to close at 11,840.45 points.

Bears were in charge as declining shares outpaced gaines in the ratio of 1.7:1 on BSE.

BSE Metal and Realty indices led the losers among sectoral indices. They fell 2.27 per cent and 1.99 per cent, respectively.

As many as 25 out of 30 Sensex stocks closed lower.

Financial stocks and IT major Infosys contributed the most to Sensex’s losses, while gains in Reliance Industries and Tata Consultancy Services (TCS) capped losses.

Private lender ICICI Bank (69.39 points) and smaller rival Axis Bank (51.73 points) contributed the most to Sensex’s losses, as they fell 2.24 per cent and 3.18 per cent, respectively.

Infosys (48.04 points contribution) followed next as it dropped 1.88 per cent after the company faced another whistleblower complaint.

FMCG firm Britannia saw its shares rise 4.94 per cent after September quarter profit jumped 74 per cent. Vodafone Idea shares tanked 7.50 per cent, a day after Vodafone Group CEO warned that without government relief, its venture in India is in a critical situation.

Analysts’ views
“Nifty is expected to trade in 11,700-12,100 range for an extended time. Short-term selling pressure is expected to push the index towards 11,700-11,750. Broader market’s health is also negative. This correction provides an excellent buying opportunity from the medium term perspective. Suggest accumulating select banking and financial services stocks” -- Sahaj Agarwal, Head of Derivatives, Kotak Securities.

“Bears managed to pierce the support zone of 11,850. We have been mentioning about near term correction on the index, especially below the support of 11,850. The index is likely to witness further profit booking. Nifty is likely to test the next support zone at 11,700. Broader uptrend remains intact and market is currently seeing a phase of consolidation, which we had anticipated,” -- Amit Shah, Technical Research Analyst with Indiabulls Ventures

Global markets
Asian stocks and Wall Street futures fell on Wednesday, as confusing signals over the extent of progress made in US-China trade talks and concern about intensifying unrest in Hong Kong hurt demand for risky assets, Reuters reported.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.03 per cent to the lowest in more than a week.

European shares retreated from four-year highs on Wednesday, on a flight to safety. The pan-European STOXX 600 index fell 0.2 per cent.
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