Sensex plummets 510 points on political worries, trade woes

Investor wealth saw an erosion of Rs 1.86 lakh crore as market capitalisation plummeted to Rs 1,43,17,308 crore. Asian markets were also in the negative zone as investors fret over the prospect of a global trade war, accelerating selling pressure on the domestic bourses, brokers said.

While the Lok Sabha could not take up notices for no-confidence motion with Speaker Sumitra Mahajan saying there was no order in the House and adjourned the proceedings for the day, analysts are expecting more action on the political front. “Market slid as investors continued to remain cautious amid current issues in US administration on global trade and domestic political uncertainties. Market is finding it difficult to consolidate at the support levels as volatility in global market brought the benchmark indices towards the 200 daily moving average. Selling was broad based, metal index lost its sheen while PSU banks somehow managed to get stabilized with a slight decline,” said Vinod Nair, Head of Research, Geojit Financial Services.

The 30-share Sensex tumbled by 509.54 points or 1.51 per cent, its biggest single day fall since February 6 when it had lost 561.22 points, to end at 33,176. Intra-day, it shuttled between 33,119.92 and 33,691.32 as metal, oil & gas, PSU, power, auto and banking stocks recorded widespread losses. The flagship index had lost 232.40 points in the previous three sessions. The broader NSE Nifty dipped below the 10,200-mark to hit a low of 10,180.25 before ending at 10,195.15, down by 165 points, or 1.59 per cent.

All the sectoral indices led by metal, oil & gas, energy, PSU, power and banking ended in the negative zone with losses of up to 2.30 per cent. Tata Motors emerged the worst performer by slumping 3.67 per cent, followed by Asian Paint 3.09 per cent. Bucking the trend, M&M, Wipro, Hindustan Unilever and Yes Bank ended in the green, rising up to 0.88 per cent. The BSE mid-cap index fell by 1.07 per cent while the small-cap index shed 1 per cent.

In Asian region, Japan’s Nikkei lost 0.58 per cent, Hong Kong’s Hang Seng fell 0.12 per cent, while Shanghai Composite Index shed 0.65 per cent. European markets, however, were in a slightly mixed form in their early deals. Paris CAC 40 was down 0.02 per cent, while Frankfurt’s DAX was higher by 0.32 per cent. London’s FTSE too up 0.20 per cent.

Jayant Manglik, President, Religare Broking, said, “Nifty fell sharply and lost nearly one and a half percent, pressurized by feeble cues. Weak global markets led to a negative start which further deteriorated on reports of widened trade deficit and political fallout between the BJP and TDP as the latter pulled out of NDA government.”

“Indices kept on extending the decline as the day’s trade progressed and gathered downside momentum in the last hour of trade. Both the benchmark Sensex and the Nifty finally closed the day with losses of 1.50 per cent. Subdued global markets and bits of political skirmishes at home dampened the investor sentiment. The India VIX (volatility index) shot up by over 5 per cent during the day,” said Karthikraj Lakshmanan, Senior Fund Manager-Equities, BNP Paribas Mutual Fund.