MARKETS STAY WEAK AS GLOBAL RISKS PILE UP

MARKETS STAY WEAK AS GLOBAL RISKS PILE UP

New Delhi May 31  Benchmark indices closed lower for the second straight day on Wednesday as political uncertainty in Italy and flaring up of trade tensions between the US and China triggered a global sell-off.

Moody’s cutting India’s 2018 GDP growth forecast added to the sombre mood, with no let-up in selling by participants ahead of May derivatives expiry, brokers said.

The BSE Sensex slipped over 43 points in volatile trade to end at 34,906.11, while the 50-share Nifty shed 18.95 points to finish at 10,614.35.

Asian markets nosedived after US President Donald Trump unexpectedly ratcheted up trade tensions with China.

The US imposed a hefty 25 per cent tariff on USD 50 billion worth of Chinese goods and tightened its noose against China’s alleged theft of US’ intellectual property rights.

Investors also reacted with caution after the populist parties’ bid to take power in Italy collapsed, leading to speculations over the country’s Euro membership.

The 30-share Sensex opened on a bearish note at 34,876.13 and slipped further to hit a low of 34,735.11 largely on sustained foreign fund outflows amid a global sell-off.

However, short-covering by speculators ahead of May derivatives expiry on Thursday and recovery in the rupee reversed the early losses, with the gauge scaling a high 35,017.45. It finally ended at 34,906.11, down 43.13 points, or 0.12%. The barometer had lost 216.24 points in the previous session.

The 50-share NSE Nifty too settled 18.95 points, or 0.18 %, lower at 10,614.35. During the session, it moved between 10,648.70 and 10,558.45.

“Market traded in a negative bias due to volatility in global market and it managed to trim some losses towards close owing to expiry led short covering.

“Q4FY18 GDP data will be unveiled tomorrow (Thursday) and the consensus is showing a growth of 7.4 per cent. Volatility in oil price and the impact on fiscal path are the major risk factors,” said Vinod Nair, head of research at Geojit Financial Services.

 

Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net of Rs 407.33 crore, while domestic institutional investors (DIIs) bought equities to the tune of Rs 578.38 crore on Tuesday, provisional data showed.

In the Sensex kitty, Tata Motors emerged as the worst performer by plunging 1.92%,  followed by ICICI Bank at 1.86%.

Other laggards were Bajaj Auto (1.11%), Axis Bank (1.10%), L&T (1.08%), Dr Reddy’s (1.05%), Adani Ports (1.01%), HDFC Ltd (0.95%), Maruti Suzuki (0.88%), ONGC (0.85%), Wipro Ltd (0.84%), Sun Pharma (0.75%), Asian Paints (0.70%), Bharti Airtel (0.62%), ITC Ltd (0.60%), NTPC (0.30%), Infosys (0.21%), Hero MotoCorp (0.15%) and TCS (0.14%).

However, M&M was the top gainer, spurting 3.08% on the back of encouraging earnings, followed by Coal India at 2.34%.

Yes Bank, Kotak Mahindra Bank, HUL, Power Grid, SBI, HDFC Bank, IndusInd Bank, Tata Steel and RIL too finished with gains.

Sector-wise, the BSE healthcare index shed 0.77%, followed by infrastructure (0.71%), capital goods (0.68%), oil and gas (0.62%), consumer durables (0.45%), realty (0.16%), PSU (0.12%), teck (0.11%), FMCG (0.10%), auto (0.09%) and IT (0.06%).

Power, metal and banking indices ended in the positive zone, rising up to 0.20%.

In the broader markets, the small-cap index fell 0.19% while the mid-cap gauge inched up 0.03%.

In Asia, Hong Kong’s Hang Seng fell 1.49%, Japan’s Nikkei shed 1.52% and China’s Shanghai Composite Index declined 2.08%. Stock market in Taiwan fell 1.30% while Singapore shed 1.90%.

European markets were mixed. Frankfurt was trading higher by 0.18%, while Paris CAC 40 fell 0.74% in their early deals. London’s FTSE rose 0.09%.