Sensex, Nifty tank on Kashmir uncertainty, escalating trade war
Volatility to persist as the market is to be largely driven by ongoing quarterly earnings.
Analysts said that the benchmarks witnessed heavy selling pressure amid persistent foreign fund outflows, negative global cues, mixed corporate earnings, slowdown in domestic consumption and uncertainty in Jammu and Kashmir.
Home Minister Amit Shah on Monday moved a bill in the Upper House to reconstitute the state of Jammu & Kashmir. Shah proposed the revocation of most sections of Article 370 which provides special status to the state of Jammu & Kashmir.
Also, China’s yuan tumbled more than 1 per cent on Monday to hit an 11-year low amid mounting fears of an escalation in the US-China trade war, which sparked a selloff in other currencies in the region, Reuters reported. Rupee cracked 98 paise against US dollar to hit a low of 70.58 as concerns over US-China trade war sent Chinese yuan below 7 a dollar level. The weakness was intensified by uncertainty over Kashmir issue, poor high frequency economic data, and escalation in foreign outflow.
Analysts expect volatility to persist as the market is expected to be largely driven by the ongoing quarterly earnings and the outcome of the RBI policy meet outcome on Wednesday.
It is widely expected that RBI will cut the benchmark interest rate for the fourth time in a row to boost the economy at a time when key indicators are pointing towards a slowdown, analysts said.
Market at a glance
BSE Sensex tumbled 418.38 points, or 1.13 per cent lower, at 36,699.84. While NSE Nifty ended at 10,862.60, down 134.75 points or 1.23 per cent.
In the 30-pack Sensex, 9 stocks ended in the green and 21 in the red with YES Bank as the worst performer and Bharti Airtel the best. Tata Motors, Power Grid, RIL and Kotak Bank too joined YES Bank on the losers list, slipping up to 9 per cent.
Tech Mahindra, TCS, HDFC and Bajaj Auto were among other Sensex stocks that advanced.
The BSE Midcap index declined 1.26 per cent and the BSE Smallcap index ended 1.69 per cent lower underperforming benchmark Sensex.
BSE Energy index recorded losses of 2.65 per cent followed by Bankex, Consumer Durables and Power index. BSE Telecom and IT indices were among the best performers.
In terms of index contribution, HDFC, TCS, Bharti Airtel and IndusInd Bank were the top support while RIL, HDFC Bank, ICICI Bank and Kotak Bank were the top drag on Sensex.
On the global front, Asian shares closed lower as an escalation of trade tensions between the US and China spooked markets and the yuan fell to its lowest levels in over a decade. MSCI's broadest index of Asia-Pacific shares outside Japan sank 2.5 per cent to depths not seen since late January. That marked the biggest one-day percentage loss since early October. In China, the blue-chip index fell 1 per cent while the troubled Hong Kong market hit a seven-month trough.
European stocks traded with losses in morning trade with the pan-European STOXX 600 index shedding 2 per cent on top of the 2.5 per cent it lost on Friday as US President Donald Trump's warning of new tariffs on China sank markets.