Business Economy

Stocks tumble on U.S.-China trade spat

The escalation of U.S.-China trade war cast its dark spell on Indian equity markets with key indices plunging in line with the global stock markets.

The S&P Nifty witnessed the longest losing streak in over 8 years and on Monday closed with a loss 130.70 points or down 1.16% at 11,148.20, below the psychological mark of 11,150.

The Sensex also closed at a two-month low of 37,090.82, down 372.17 or 0.99%. Top losers included Sun Pharma (9.39%), Yes Bank (5.58%), Tata Steel (3.22%), IndusInd bank (3.20%) and Tata Motors(3.09%).

Sun Pharma had plunged 20% in intra-day after reacting to news of a lawsuit being filed in the U.S. against its subsidiary Teva Pharmaceuticals, among others.

“Nifty has been showing weakness since last week by breaking the important support of 11,500 level. The momentum and volatility indicators had already turned bearish on daily charts. This bearishness was fuelled further by UBER’s disastrous debut on NYSE on Friday, which led to further turmoil in Indian as well as global markets,” said Meghana V Malkan, co-founder, Malkansview.

“Considering the global meltdown and the intensity of weakness on the weekly charts, Nifty can further correct to 10,850-10,900 levels in the coming trading sessions,” Ms. Malkan said.

“Major selling pressure was seen in PSU bank and pharma stocks. The pharma index declined on news that generic drug companies [including a few Indian generic companies] allegedly inflated prices and are now being sued by U.S authorities,” said Hemang Jani, Head, Advisory, Sharekhan by BNP Paribas.

“Q4FY19 results have majorly been lackluster and given that elections results are due this month the markets might continue to remain volatile,” he said.

Rupee at 2-month low

The rupee came under pressure due to foreign fund outflows and on renewed concern of rising crude oil prices. On Monday the rupee depreciated 59 paise against the dollar to close at nearly two-and-a half-month low of 70.51 against Friday’s close of 69.92. Brent crude futures rose 1.57% to $ 71.73 per barrel due to tensions in the Middle East.

Source: thehindu.com

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