Sensex crashes 624 points; Nifty ends below 10,950: five factors behind this slide
NEW DELHI: equity indexes fell on Tuesday to end in red with the benchmark BSE sensex falling more than 600 points ahead of key retail inflation or consumer price data. Sensex fell 624 points or 1.66 percent to close at 36,958; while the broadest NSE Nifty moved 184 points or 1.65 percent lower to settle at 10,926.
The main laggards in the BSE index include Yes Bank, Bajaj Finance, Mahindra, Mahindra, Maruti, Bharti Airtel and HDFC with their shares up to 10.96 percent. 27 shares in the BSE index of 30 shares closed in red.
On the NSE platform, all sub-indices witnessed losses with Nifty Auto and PSU Bank falling to 3.95 percent amid mass sales in global stocks. Automobile stocks plummeted after Siam (Society of Indian Automobile Manufacturers) reported that passenger vehicle sales witnessed its biggest decline in almost 19 years in July, leaving nearly 15,000 unemployed workers in the past two or three months.
July retail inflation data will be released after market hours.
Here are the five factors behind this slide:
1) trade war between the United States and China
The markets receded in the face of uncertainty about the trade talks between the United States and China. The comments of the president of the United States, Donald Trump, who questioned the commercial talks planned for next month, as well as his decision to reveal more tariffs on Chinese products, caused the shares to fall last week and analysts of Goldman Sachs said they don't expect an agreement before 2020 U.S. presidential election.
2) Hong Kong protests
The rise in riots in Hong Kong also reduced markets as protests extended to a third month, with the city's airport, a major global transportation hub, which suspended all billing operations on Tuesday. The airport canceled all incoming and outgoing flights on Monday when thousands of protesters descended.
3) Argentine currency fall
Argentina became the last focus of concerns after the primary elections, held on Sunday, which showed surprisingly strong performance by opposition candidate Alberto Fernández and his formula partner, former President Cristina Fernández, which generated fears about a possible return to their interventionist policies.
The peso closed 15 percent weaker at 53.5 per US dollar on Monday after falling around 30 percent to an all-time low earlier in the day, while the local Merval stock index closed 31 percent weaker.
4) Weak Indian Rupee
The Indian rupee weakened 0.4 percent, reaching a minimum of almost six months of 71.20 (intraday) against the US dollar.
5) There is still no decision on IPF
Finance Minister Nirmala Sitharaman did not give evidence Friday at a meeting with foreign portfolio investors (FPIs) that she would withdraw a budget proposal to increase her taxes.
Sitharaman is still expected to modify some budget proposals and announce new measures to boost economic growth, although the absence of such an announcement can be disconcerting for investors, said Saurabh Jain, assistant vice president of research at SMC Global Securities in Mumbai to the agency from Reuters news. .
So far no concrete measures have been taken, despite the guarantees of the finance minister and the prime minister's office, Jain added.
Meanwhile, foreign portfolio investors (FPIs) bought shares for a net worth of Rs 203.73 million on Friday, while national institutional investors (DII) bought shares for Rs 606.92, according to provisional data.
National markets closed on Monday because of Eid al-Adha.
(With agency contributions)